GST collections rise 6.1% to Rs 1.74 trillion in December despite tax cuts

India’s December GST data shows muted growth, rising refunds and a sharp fall in compensation cess collections

January 1, 2026

GST rate rationalisation impacts revenue as net collections grow just 2.2% despite higher gross GST receipts in December

Net GST revenue rises just 2.2% as refunds climb 31%

Gross Goods and Services Tax (GST) collections rose 6.1 percent year-on-year to over ₹1.74 trillion in December 2025, government data released on Thursday showed, even as revenues from domestic sales remained subdued following sweeping tax cuts.

Gross GST revenue in December 2024 stood at over ₹1.64 trillion.

Revenue from domestic transactions increased marginally by 1.2 percent to more than ₹1.22 trillion, reflecting slower consumption growth. In contrast, collections from imported goods surged 19.7 percent to ₹51,977 crore during the month.

Refunds jumped sharply by 31 percent to ₹28,980 crore in December, pulling down net GST collections. After adjusting for refunds, net GST revenue stood at over ₹1.45 trillion, registering a modest year-on-year growth of 2.2 percent.

Cess collections fell steeply to ₹4,238 crore last month, compared with ₹12,003 crore in December 2024.

The muted revenue growth comes in the backdrop of major GST rate rationalisation implemented from September 22, 2025, when tax rates on around 375 items were slashed to make goods cheaper. Additionally, the compensation cess is now levied only on tobacco and related products, instead of a wider range of luxury, sin, and demerit goods earlier, further impacting overall GST collections.

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