Despite the October slowdown, GST revenues are expected to rebound sharply in November, with internal government assessments reviewed by The Mint indicating that the September rate cuts will not significantly dent central or state revenues.
Officials told The Mint that overall revenue buoyancy should remain strong, backed by resilient domestic demand and an expanding indirect tax base.
As reported by The Mint, gross GST receipts grew at an average annual rate of 9.8% between April and September, before dropping to 4.6% in October. However, assessments shared with the publication project a recovery to nearly 10% growth in November, taking monthly GST collections close to Rs 2 trillion. One senior official told The Mint that October's receipts of Rs 1.96 trillion reflected consumer behaviour shaped by expectations of rate reductions.
Many shoppers held off high-value purchases early in September and returned to the market after the tax cuts became effective on 22 September. "People knew from 3 September that tax cuts would be effective from 22 September," the official said.
As The Mint highlighted, GST receipts reported in October capture transactions from September-when buyers delayed purchases to benefit from the rate revision. November collections, which reflect October sales, will show the first full-month impact of the rate cuts and will be released on 1 December. The finance ministry did not respond to emailed queries from The Mint seeking comments on revenue expectations.
In its 27 October monthly economic review, cited by The Mint, the finance ministry said the GST reforms would stimulate domestic demand by reducing the indirect tax burden on households and businesses. The restructuring streamlined the GST framework into two key slabs-5% and 18%-with a special 40% rate maintained for luxury and sin goods. The Mint report noted that the intention behind this overhaul was to boost consumption, reduce the cost of essential and aspirational items, and simplify compliance for businesses.
The consistent strength in GST collections, The Mint reported, is expected to support the Centre's FY26 fiscal deficit target of 4.4%, especially at a time when direct tax collections are growing below the 16% required to reach the Rs 25.2 trillion target. Officials told The Mint that no state government has raised revenue concerns since the reform rollout. Businesses have largely passed on the benefit of rate cuts to consumers, giving a noticeable lift to demand. They added that, consistent with earlier rounds of GST rate revisions, collections tend to normalise quickly after a temporary dip.
The Mint also reported that authorities expect the taxpayer base to expand rapidly due to complementary reforms such as easier GST registrations. From 1 November, automated GST registration has been implemented for low-risk enterprises whose output tax liability does not exceed Rs 2.5 lakh per month. Since the introduction of GST in 2017, The Mint highlighted that India's indirect taxpayer base has grown from 6.39 million to more than 15.1 million, underscoring increased formalization and compliance.
Tax experts told The Mint that GST collections after the 22 September rationalisation demonstrate that the economy has absorbed the rate revisions without revenue disruption. Rajat Mohan, senior partner at AMRG & Associates, said the buoyancy in collections reflects both strong domestic demand and improvements in the GST ecosystem. The Mint noted that the finance ministry's economic outlook for FY26 remains positive, aided by healthy consumption, a favourable monsoon, moderating inflation, monetary easing and the benefits of GST simplification.
Mohan told The Mint that sectors benefiting from the rate cuts-particularly mass-market goods and certain services-are already showing improved sentiment, which is likely to translate into stronger turnover in the coming months. He added that policy stability and digital enforcement tools will be key to ensuring the full realisation of the September reforms across industries.
As highlighted by The Mint, the central government has set a GST revenue target of Rs 10 trillion for the current financial year, requiring 11.2% annual growth.
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