Experts say GST collections show resilience after rate cuts; point to stable domestic demand

NEW DELHI: The Goods and Services Tax (GST) data of December 2025 reflects resilience in India’s tax collections despite steep rate cuts earlier in the year, with imports, steady domestic demand and higher refunds shaping the overall revenue picture, stated experts reacting positively to the GST numbers.

Pratik Jain, partner at Price Waterhouse & Co LLP, said that the growth of monthly GST collections is encouraging even after the significant reduction in GST rates. He said, “Despite the steep cut in GST rates earlier this year, a growth of around 6 per cent in gross monthly collection is encouraging, though it’s largely attributable to imports. If this momentum continues for the remaining months of this fiscal, the YoY growth of around 9 per cent is still possible”.

Manoj Mishra, partner and Tax Controversy Management Leader at Grant Thornton Bharat, said the December GST numbers reinforce the structural strength of India’s formal economy. Gross GST collections grew 6.1 per cent year-on-year to Rs 1.75 lakh crore, which he described as an encouraging signal.

He stated, “The composition of collections is equally telling with import-related IGST growth of 19.7 per cent points to resilient supply chains and manufacturing momentum, while steady domestic collections reflect stable consumption”.

As the Union Budget 2026-27 approaches, he said these trends strengthen the case for building further on GST 2.0 reforms, including automation of compliances, reduction of unwarranted litigation and a calibrated credit framework.

Karthik Mani, partner, Indirect Tax at BDO India, said net GST collections for December 2025 declined by around 4.3 per cent on a month-on-month basis.

He added, “The gross GST collections on domestic transactions for December 2025 have largely remained flat on a year-on-year basis, despite the impact on revenue in the current period due to major rate cuts in September 2025, indicating some improvement in the economic activity on a year-on-year basis. The next few months should give a decent indication of new normal monthly GST collections, after adjusting for rate cuts.”

Mahesh Jaising, Partner and Indirect Tax Leader at Deloitte India, said GST collections for December 2025 reflect continued revenue buoyancy supported by festive-season consumption and rate rationalisation measures.

He said, “The GST council’s policies have clearly translated into higher compliance and improved cash flows across sectors. These trends indicate that even post the GST 2.0 path-breaking tax rate reductions, the tax system continues to mature, demonstrating both elasticity and stability as the economy scales.”

The Goods and Services Tax (GST) collections in December, in gross terms, rose 6.1 per cent to about 1.75 lakh crore compared to about 1.64 lakh crore in the same month last year, according to official data released Thursday. (ANI)