GST Collection Reaches Three-Month High in January

India’s total Goods and Services Tax (GST) collection increased by 6.2 percent in January, reaching a three-month high of over ₹1.93 lakh crore. The rise indicates that stronger consumer demand has successfully offset the impact of recent GST rate cuts.

Since September 2025, GST rates have been reduced on nearly 375 items, making goods cheaper. Additionally, the earlier four tax slabs of 5%, 12%, 18%, and 28% were merged into two slabs of 5% and 18%. A higher slab of 40% has been retained for select ultra-luxury goods and tobacco products.

GST Collection at ₹1.93 Lakh Crore

Refunds declined by 3.1 percent to ₹22,665 crore in January, resulting in a 7.6 percent increase in net GST revenue to approximately ₹1.71 lakh crore.

Gross domestic tax collections rose by 4.8 percent to ₹1.41 lakh crore, while import-related GST revenue increased by 10.1 percent to ₹52,253 crore.

Before the implementation of GST rate reductions, collections had declined, with revenue falling to ₹1.70 lakh crore in November and then recovering to ₹1.74 lakh crore in December.

Higher Consumption Offsets GST Rate Cuts

January’s GST collection of ₹1.93 lakh crore is close to the peak level of ₹1.96 lakh crore recorded in October.

Cess collection, mainly from tobacco products, stood at ₹5,768 crore in January. In comparison, cess collection in January last year was ₹13,009 crore, when higher cess was levied on luxury goods such as automobiles and tobacco products.

The rise in GST collections despite rate cuts suggests that consumption growth has exceeded policymakers’ expectations. However, concern remains as several large states have reported only single-digit growth in GST revenue, although gradual improvement has been observed over the past three months.