NEW DELHI: A sharp increase in tax revenues on account of imports helped in the rise of net goods and services tax (GST) collection in October.
After accounting for refunds, GST collection for the month rose 25.6 per cent year-on-year to Rs 2.03 trillion, marking the highest growth rate this financial year, according to the provisional data released by the finance ministry on Sunday.
Gross GST mopup too recorded its fastest growth in 2026-27, rising 22.9 per cent annually to Rs 2.31 trillion. In absolute terms, both gross and net GST collection stood at second position this financial year, after touching Rs 2.42 trillion and Rs 2.10 trillion, respectively, in April.
The strong growth in October GST collections contrasts with a 0.6 per cent net revenue growth rate seen in the year-ago period. GST revenue collection in October last year reflected the effect of both the anticipation of a massive GST rate cut and its implementation in the fourth week of September last year.
Gross GST collection crossed Rs 2 trillion for the fourth time in the first seven months of FY27, following April, July and September. Net GST collection crossed the mark for the second time, after April. The latest increase in net GST follows a growth rate of 18.1 per cent in September, 8.3 per cent in August and 15.8 per cent in July.
Import-linked GST continued to outpace domestic collection. Gross integrated GST (IGST) from imports rose 42.2 per cent year-on-year to Rs 72,246 crore in October, accounting for nearly a third of the total. After adjusting for refunds, net GST from imports increased 56.2 per cent to Rs 58,319 crore.
Gross domestic GST rose 15.8 per cent to Rs 1.59 trillion during the month while net domestic collection increased 16.4 per cent to Rs 1.45 trillion.
The GST Council’s recent decisions to liberalise provisions of input tax credit and allow refunds of input tax credit on input services and capital goods under an inverted duty structures were well timed. These measures could improve industrial competitiveness, support exports, stimulate fresh investment and strengthen the growth momentum, he said. Refunds rose 6.5 per cent to Rs 27,934 crore in October as against Rs 26,225 crore a year earlier.
Domestic refunds rose 9.8 per cent to Rs 14,007 crore, while refunds related to exports through ICEGATE, the customs electronic data interchange platform, increased 3.4 per cent to Rs 13,927 crore.
Saurabh Agarwal, tax partner at EY India, said sustained growth in import-linked collection underscored the need to further strengthen domestic manufacturing capabilities.
While production-linked incentive schemes had delivered encouraging outcomes in select sectors, it might be time to revisit and recalibrate schemes in areas with unutilised budgets to better support the objective of an Aatmanirbhar Bharat, he said. Agarwal also pointed to broadbased growth across states including Rajasthan, Bihar, Manipur, Mizoram, Assam, Meghalaya, Jharkhand and Madhya Pradesh, and the Union Territory of Jammu & Kashmir.
He expected demand in the festival season demand to keep collection strong in the coming month and urged businesses to maintain robust compliance and reconciliation processes.
Abhishek Jain, partner and national head of indirect tax at KPMG in India, said the October collections reflected sustained economic activity, improved tax compliance and the resilience of India’s consumption and trade ecosystem.
“The October numbers provide a positive signal for revenue mobilisation and reinforce the growing maturity of India’s GST framework,” he said.
In April-October, gross GST collection grew 13.2 per cent to Rs 14.78 trillion, compared with Rs 13.05 trillion in the corresponding period of last financial year. Net GST revenue rose 12.6 per cent to Rs 12.69 trillion from Rs 11.27 trillion a year earlier.
Import-linked collection continued to outperform domestic revenues in the period.
Gross GST from imports rose 29.3 per cent to Rs 4.44 trillion while net revenue from imports increased 34.1 per cent to Rs 3.54 trillion. In comparison, gross domestic GST grew 7.4 per cent to Rs 10.33 trillion, while net domestic collection rose 6 per cent to Rs 9.15 trillion.
Source: Business Standard
