GST surges 9.1% to ₹1.89 lakh crore, 9th straight month above ₹1.8 lakh crore

India’s GST collections surged to ₹1.89 lakh crore in September, up 9.1% year-on-year, marking the sharpest pace in four months and reinforcing the resilience of tax revenues despite subdued consumer spending ahead of rate cuts.

September marked the ninth straight month of collections exceeding ₹1.8 lakh crore, with the latest pickup outpacing August’s 6.5% growth. Though robust, the quarterly growth moderated to 7.7% in Q2 FY26, compared to 11.7% in Q1, suggesting a gradual tapering as the impact of recent GST rate changes takes hold.

On September 22, the government rolled out a simplified two-rate GST structure, merging the 28% and 12% slabs into 18% and 5%, respectively — a shift that pushed over 90% of taxable goods into the lower tax bracket. While this temporarily dampened consumer spending on non-durables, it is expected to boost consumption in the coming quarters.

Despite the rate cut-induced lull, both the government and the Reserve Bank of India remain optimistic. The central bank recently revised India’s GDP growth forecast upward to 6.8% from 6.5%, citing expected tailwinds from rate rationalisation and resilient domestic demand. S&P Global Ratings echoed this outlook, maintaining a 6.5% growth estimate, saying domestic momentum will help cushion against external shocks, including new US tariffs.

However, the ₹1.89 lakh crore still trails April’s record-high ₹2.4 lakh crore, and officials expect some moderation in the near term. Analysts believe the full benefits of rate cuts and strengthened compliance will emerge gradually, helping stabilize and possibly lift collections in the second half of the fiscal year.