Festive demand lifts October GST collections to Rs 1.96 lakh crore, but refund pressure ahead

India’s gross Goods and Services Tax (GST) collections rose 4.6 per cent year-on-year to Rs 1.96 lakh crore in October 2025, driven by strong festive demand and pent-up consumption, according to government data released on Saturday.

The increase came despite GST rate cuts on 375 items — from kitchen essentials and daily-use goods to electronics and automobiles — that took effect from September 22, coinciding with the start of Navratri, a key festive period for consumer spending. Many consumers had postponed purchases in anticipation of these cuts, announced by Prime Minister Narendra Modi during his Independence Day speech.

October’s mop-up was higher than the Rs 1.87 lakh crore collected a year ago, though the 4.6 per cent growth was below the 9 per cent average seen in previous months. Domestic GST revenue rose 2 per cent to Rs 1.45 lakh crore, while import revenue jumped 13 per cent to Rs 50,884 crore. Refunds surged nearly 40 per cent year-on-year to Rs 26,934 crore, bringing net GST revenue to Rs 1.69 lakh crore — a marginal 0.2 per cent rise.

Vivek Jalan, Partner at Tax Connect Advisory Services, said October was the first full month reflecting the impact of the GST 2.0 rate cuts. “Even after the rate reductions, consumption growth has offset some revenue loss,” he noted.

However, Jalan cautioned that the revised structure has deepened inverted duty issues in sectors like packaging, pharmaceuticals, and farming, likely leading to a spike in refund claims in the coming months. With only 54 per cent of the Centre’s annual GST target achieved so far, overall revenue growth may face pressure later in the fiscal.