Mixed GST Collections in October, but SBI Projects Stronger FY26 Revenue Than Budgeted

Data from the GST Portal reveals that in October, 20 states and Union Territories registered a de-growth in GST collection, with some facing declines of up to 24%. Key states like Haryana saw flat collections, while Delhi, West Bengal, and Rajasthan experienced a reduction. Madhya Pradesh, Andhra Pradesh, and Kerala were also among those showing a decline. A notable trend was observed in the North Eastern states, where six out of eight registered a slip in collections compared to September.

Experts attribute the muted collections in late September and October to consumers postponing discretionary purchases, anticipating price reductions from rate cuts that became effective in the last week of September. "This is due to the somewhat muted demand in the first three weeks of September 2025, where some of the discretionary purchases were postponed to the last week of the month, or even in the subsequent month, awaiting the reduction in price due to rate cuts. Further, the rate reductions, which became effective in the last week of September 2025, also impacted the overall collections, despite the actual buying likely to have shown an uptick," said Karthik Mani, Partner at BDO India.

However, a rebound is expected. Manoj Mishra, Partner at Grant Thornton Bharat, stated, "The collections for November 2025 are likely to be higher, both due to festival demand and increased affordability from lower rates. The impact of the rate reduction should be offset by the higher volume of supplies."

Furthermore, early retail indicators show broad-based demand across autos, FMCG, apparel, and electronics, reflecting renewed consumer confidence.

A research report by economists at State Bank of India (SBI), led by Soumya Kanti Ghosh, supports a positive outlook. The report indicates that the strong momentum in GST collections refutes apprehensions of a significant decline post-rationalisation. For instance, while Karnataka had estimated a monthly decline of ₹7,083 crore and West Bengal ₹1,667 crore, Karnataka actually saw a 10% gain in October 2025 compared to October 2024. Punjab gained around 4%, and Telangana saw a 10% gain. West Bengal's decline was marginal at 1%, and Kerala witnessed a 2% decline.

Based on these trends, the SBI report projects that GST revenue for FY26 will still be higher than budgeted collections, assuming states experience similar post-rationalisation gains and losses as seen in October 2025. The Budget Estimates for FY26 peg GST Collection for the Central government (CGST and Compensation Cess) at ₹11.78 lakh crore, an increase of nearly 11% over FY25.

Impact: This news has a moderate to high impact on the Indian stock market. GST collections are a key indicator of economic health and consumer spending. Positive GST trends can boost investor confidence, especially in consumption-linked sectors. Conversely, widespread de-growth could raise concerns about economic slowdown. The SBI projection offers reassurance, potentially stabilizing market sentiment around economic recovery and government revenue. Rating: 7/10

Difficult Terms: GST: Goods and Services Tax. A comprehensive indirect tax levied on the supply of goods and services in India. FY26: Fiscal Year 2026, which runs from April 1, 2025, to March 31, 2026. De-growth: A decline in growth rate, meaning a reduction in the collection amount compared to a previous period. Discretionary purchases: Spending on non-essential goods or services, like luxury items or entertainment. Rationalisation: In this context, it refers to the simplification and restructuring of GST rates and slabs. CGST: Central Goods and Services Tax. The portion of GST revenue collected by the Indian central government. Compensation Cess: A special tax levied on certain luxury or demerit goods to compensate states for any revenue loss experienced due to the implementation of GST.