New Delhi: India’s Gross Goods and Services Tax (GST) revenue recorded a marginal annualized growth of less than 1% in November, reaching ₹1,70,276 crore. This figure is the lowest recorded in the first eight months of the current fiscal year (2025-26) and compares to ₹1,69,016 crore collected in November 2024.
This short-term moderation was widely expected by government officials and industry experts, as the collections reflect business transactions in October 2025—the first full month following the radical GST rate rationalization, often referred to as GST 2.0.
Impact of GST Rate Rationalization
The GST Council announced “GST 2.0” on September 3, introducing a transformative two-slab rate structure of 5% and 18%, replacing the previous four-slab system. The lower GST rates took effect from September 22, making hundreds of products cheaper.
- Cess Revenue Plunges: The rate cuts included the removal of the compensation cess on most luxury items, except for sin goods like tobacco and pan masala. Consequently, Cess revenue fell sharply by over 69% to ₹4,006 crore in November 2025, compared to ₹12,950 crore in November 2024.
- Net Collections: Net GST revenue after refunds saw a modest 1.3% increase, rising to ₹1,52,079 crore in November 2025 from ₹1,50,062 crore in the same month last year.
Consumption Boost Vindicates Rate Cut Strategy
While the gross revenue growth moderated, officials noted that the revenue did not fall significantly, a positive sign given the steep rate cuts. Furthermore, government data indicates that the cuts spurred a significant boost in consumption.
- Taxable Value Surge: Internal data cited by a government official shows that the taxable value of all supplies grew by 15% during the two-month period of September-October 2025, compared to the 8.6% annualized growth recorded in the same period of 2024.
- Official Statement: “This surge in taxable value demonstrates strong consumption uplift, stimulated by reduced rates and improved compliance behavior,” an official stated. “It vindicates our strategy that reducing rates on essentials and mass-use sectors would create demand-side buoyancy.”
M.S. Mani, partner at Deloitte India, echoed this sentiment: “While the GST collections were expected to moderate due to the steep rate cuts across the board, there was an expectation of a consumption boost on account of these rate cuts.”
Pratik Jain, partner at Price Waterhouse & Co. LLP, expects collections to improve in the coming months as the steady increase in demand progressively translates into higher collections. Trends already confirm that GST 2.0 has not disrupted “revenue stability” and has led to buoyancy in key sectors, including FMCG, cars, cement, pharmaceuticals, and medical devices.
Cumulative Financial Year Performance
Despite the November slowdown, the cumulative performance for the first eight months of the fiscal year remains strong:
- Gross Revenue (April-November 2025): Registered nearly 9% growth to over ₹14.75 lakh crore, up from ₹13.55 lakh crore in the same period last year.
- Cumulative Net Revenue: Rose by 7.3% to ₹12,79,434 crore during the April-November 2025 period.