India’s goods and services tax (GST) collections saw a significant rise in September 2025, reaching Rs. 1,89,000 crore (US$ 21.29 billion), marking a 9.1% year-on-year (YoY) growth. This increase comes amid the recent GST rate rationalisation implemented by the government, which has improved economic activity and consumer spending across sectors. The collections were higher than Rs. 1,86,000 crore (US$ 20.96 billion) in August 2025 and Rs. 1,73,000 crore (US$ 19.49 billion) in September 2024, reflecting steady momentum in revenue generation.

Breaking down the figures, domestic GST revenue rose 6.8% to Rs. 1,36,000 crore (US$ 15.32 billion), while GST from imports surged 15.6% to Rs. 52,492 crore (US$ 5.91 billion). The refunds issued by the government also rose sharply by 40.1% YoY to Rs. 28,657 crore (US$ 3.23 billion), highlighting the enhanced efficiency of the refund mechanism and providing much-needed relief to businesses. This led to a net GST revenue of Rs. 1,60,000 crore (US$ 18.03 billion), up 5% YoY.

According to Mr. MS Mani, Partner at Deloitte India, the growth in GST collections reflects continued economic activity despite GST rate cuts. Improved processes for claiming refunds and settling tax dues have also contributed to smoother operations for businesses, ensuring consistent revenue inflow to the exchequer.

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The GST reforms effective from September 22, 2025, introduced a simplified four-slab structure: 0%, 5%, 18%, and 40%, replacing the earlier six-tier system. Nearly 375 items saw price reductions across essentials, medicines, electronics, and automobiles, enhancing affordability for consumers.

• The 0% slab covers ultra-high-temperature (UHT) milk, Indian breads, select life-saving medicines, and life and health insurance premiums.

• The 5% slab applies to personal care products such as toothpaste and shampoo, dairy items like butter and ghee, footwear priced up to Rs. 2,500 (US$ 28.17), and select textiles.

• The 18% slab includes household appliances, televisions, air conditioners, cars up to 1,200 cc, and motorcycles up to 350 cc.

• The newly introduced 40% slab applies to luxury and sin goods, including premium cars, tobacco, and alcoholic beverages.

The GST collections growth, combined with these reforms, indicates that policy interventions are supporting economic activity, improving compliance, and generating higher revenue. Analysts note that the rationalised GST structure simplifies tax compliance, reduces cascading effects, and boosts consumption, especially during festival seasons when sales across goods and services increase.

In summary, India’s GST collections in September 2025 reflect a healthy economy, with revenue gains driven by higher domestic sales, increased imports, and effective implementation of tax reforms. The four-slab GST system, along with faster refunds, is expected to continue supporting businesses and sustaining government revenue, creating a robust framework for economic growth in the coming months.

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