Key Takeaways
- October 2025 GST collections grew 4.6% year-on-year to ₹1.96 lakh crore
- Most states recorded revenue gains, defying predictions of post-rationalisation losses
- Historical data shows initial dips followed by sustained growth after rate adjustments
October’s robust GST collections have disproven widespread fears of massive revenue losses following rate rationalisation, according to an SBI Research report. The data refutes state-level apprehensions about declining revenue post-rationalisation.
While estimates for short-term GST losses ranged from ₹48,000 crore (Finance Ministry) to ₹10 lakh crore (private analysts), October 2025 collections actually increased 4.6% year-on-year to ₹1.96 lakh crore. Domestic revenue grew 2%, while import revenue surged 12.8%.
State-Level Performance Defies Expectations
Refunds for October reached ₹26,934 crore (+39.6% year-on-year), bringing net collections to ₹1.69 lakh crore, up 0.6% annually. State-level concerns proved unfounded, as highlighted in SBI Research’s report titled ‘The Loss That Never Was!’
Karnataka, which had anticipated a ₹7,083 crore monthly drop, actually gained 10%. Telangana and Punjab saw increases of approximately 10% and 4% respectively. Only West Bengal and Kerala experienced minor declines of 1% and 2%.
Positive Outlook for FY26
SBI Research stated: “Assuming that states experience same gains (and losses) post rationalisation as in October 25, we project GST revenue for FY26 wherein on a very rudimentary basis, most of the states seem to experience positive gains for the entire fiscal post rationalisation confirming overall states should remain Net Gainers post GST rationalisation.”
FY26 projections based on October trends indicate most states will be net gainers: Maharashtra (+6%), Karnataka (+10.7%), and Gujarat (+5.9%). Only a few states like Jharkhand (-5.2%) and Uttarakhand (-4.6%) are expected to see declines.
Historical Pattern Confirmed
The report noted that historical evidence from 2018 and 2019 rate cuts reinforces this pattern. Initial monthly dips of 3-4% (approximately ₹5,000 crore) were followed by sustained growth of 5-6%, generating nearly ₹1 lakh crore in additional revenue annually.
