ADITYA RAJ DAS
India’s Goods and Services Tax (GST) revenue grew 6.5% year-on-year to ₹1.86 lakh crore in August 2025, marking the eighth consecutive month above the ₹1.8 lakh crore threshold. The sustained momentum highlights resilient domestic consumption and steady economic activity despite global challenges.
August Performance
According to Finance Ministry data:
- Gross domestic GST rose 9.6% to ₹1.37 lakh crore.
- GST from imports fell 1.2% to ₹49,354 crore, indicating softer trade flows.
- Refunds dropped 20% to ₹19,359 crore, boosting net realisations.
- Net GST revenue jumped 10.7% to ₹1.67 lakh crore.
Collections from Central GST, State GST, Integrated GST, and cess all posted year-on-year growth.
For the April–August FY26 period, GST mop-up stood at ₹10 lakh crore, up 9.9% from ₹9.13 lakh crore in the same period last year.
Long-Term Growth Trend
GST has become a key pillar of India’s fiscal base, with collections rising from ₹11.37 lakh crore in FY21 to a record ₹22.08 lakh crore in FY25. The average monthly collection in FY25 was ₹1.84 lakh crore, the highest since the system’s launch in July 2017.
Reform on the Horizon
The upbeat numbers come ahead of the GST Council meeting on September 3–4 in New Delhi, where Centre and states will deliberate on a major rationalisation exercise. Proposals include:
- Shifting most goods into two main slabs of 5% and 18%.
- Levying a 40% rate on sin goods such as tobacco, cigarettes, and sugary beverages.
Prime Minister Narendra Modi, in his Independence Day speech, hinted at “next-gen GST reforms” by Diwali, with the upcoming meeting expected to set the stage.
Economic and Fiscal Implications
The strong revenue run has bolstered India’s fiscal outlook. Morgan Stanley, citing robust Q1 GDP growth of 7.8% and tax buoyancy, upgraded its FY26 growth forecast to 6.7% from 6.2%. The investment bank said proposed GST cuts, festive season demand, and rural recovery could offset external pressures such as weaker exports after US tariff hikes.
Analysts say the combination of tax buoyancy and structural reforms positions India well to navigate global uncertainties, while also creating headroom for targeted fiscal support in growth-critical sectors.