Budget 2025: Centre's GST collections for FY26 projected at Rs 11.8 lakh crore

Govt proposes to amend GST rules regarding input tax credit

The Union Budget 2025 has projected the Centre’s goods and services tax (GST) collections for the financial year 2025-26 (FY26) at Rs 11.8 lakh crore, representing an increase of 11.3 percent from the estimated Rs 10.6 lakh crore collected in the previous year.

Finance minister Nirmala Sitharaman presented the second full budget of the Modi 3.0 in Parliament on February 1.

The projected increase in GST collections for FY26 underscores optimism about sustained economic growth and the effectiveness of tax administration reforms.

The previous Budget presented in July after the general election had pegged the GST collection at Rs 10.6 lakh crore.

GST revenues have been on a consistent upward trajectory, reflecting robust economic activity and improved compliance.

In December, collections reached Rs 1.77 lakh crore, marking a 7.3 percent year-on-year increase from Rs 1.65 lakh crore in the year-ago period. December also marked the tenth consecutive month where collections surpassed the Rs 1.7 lakh crore threshold.

In the October-December 2024 quarter, GST collections averaged Rs 1.82 lakh crore, higher than the Rs 1.77 lakh crore recorded in the previous quarter.

The quarterly collections were 8.3 percent higher than the same period in the previous year, indicating sustained economic momentum.

For the first nine months of FY25, cumulative GST revenues stood at Rs 16.3 lakh crore, reflecting year-on-year growth of 9.1 percent.

To achieve the 2025-26 budgeted target, higher growth would be critical, which would require maintaining and improving the economic recovery trajectory.

Post-pandemic economic recovery that drove consumption and the government’s efforts to improve compliance have enhanced tax administration efficiency. Inflationary pressures, too, contributed to higher tax collections in nominal terms. These factors have combined to create a robust fiscal performance in terms of GST receipts.