A strong growth in imports helped the central and state governments collect ₹1.75 trillion in Goods and Services Tax (GST) receipts in December before adjusting for refunds, a 6.1% improvement over the year-ago period. After refunds, GST revenue receipts stood at ₹1.46 trillion, 2.2% more than the receipts in the year-ago period.
A near-20% annual growth in Integrated GST (IGST), which is levied on imports, to ₹51,977 crore in December suggests robust external trade flows as a large part of the imports go into export production. IGST is levied on imports to make sure that it is taxed at the same level as domestically produced goods that are subject to GST. It is the basic customs duty (BCD) that is levied over and above IGST on imports that gives tariff protection to local products. BCD proceeds are not included in GST receipts.
For the sake of fair comparison, December’s gross GST collection figures without compensation cess proceeds are compared with the same from the year-ago period. GST compensation cess proceeds—which was levied only on tobacco in December – fetched ₹4,536 crore, down from ₹11,471 crore the previous December, when the levy covered all items on the 28% slab.
“Cess currently continues only on tobacco and pan masala. So, we can’t include it in the base of last year for comparison. GST rate rationalization is an exercise independent of compensation cess. So, cess should not be included in the base for comparison purposes,” a government official said.
The 6.1% growth in gross GST collection is in spite of the GST rate reduction effective from 22 September.
Reduced indirect tax burden helps to lower the prices for consumers and enhances their purchasing power. Policymakers believe the tax relief will boost household consumption, which accounts for over 60% of India’s gross domestic product, will improve over the medium term and help make up for the impact of the rate reduction.
Besides tax rate reduction, the GST Council also implemented a revised system of tax refunds to improve ease of doing business.
“December 2025 GST numbers set a stable base post the GST rate rationalization and indicate that the adjustment phase is largely behind us. Going forward, collections are expected to normalise and track underlying economic activity rather than policy-led distortions,” said Rajat Mohan, senior partner at chartered accountancy firm AMRG & Associates.
“The data provides confidence that GST revenues will remain predictable in the coming months, driven primarily by compliance and consumption trends, while also giving policymakers room to focus on further simplification without compromising fiscal stability,” added Mohan.
“While the strong growth seen in the first six months of FY26 seems to have tapered down on account of the sharp reduction in GST rates from 22 September, gross collection growth of 6.1% in December and 8.6% on cumulative basis indicates that consumption has certainly been on the upswing and the volume growth in many businesses is making up for the lower rates associated with these volumes,“ said M.S. Mani, partner at Deloitte India.
State-wise split
Among major state economies, Haryana witnessed a 16% annual jump in GST revenue collection in December, while Maharashtra reported a 15% growth, Gujarat a 12% growth and Tamil Nadu an 8% growth.
