GST collections have demonstrated robust recovery with gross collections reaching ₹12.46 trillion during April-September 2026, up 11.6% over the corresponding period last year. According to the Finance Minister's latest assessment, every month from June through September recorded double-digit annual growth, with collections for these four months accelerating by nearly 15%. Net collections also grew by 10.4% over the half-year period, indicating that taxpayer relief has coexisted with growth in resources available for development. The expansion has created significant opportunities for businesses across India's diverse economic landscape, with reported taxable supplies growing by 25.8% between October 2025 and July 2026 over the corresponding period a year earlier. Consumer supplies reported in the GST system have grown 26.7%, faster than taxable supply overall, a trend the GST Council views as an indication of better reporting.
The GST system has achieved a significant milestone with the overall effective GST rate declining to 10.84% from 11.74%, while the effective rate of tax on domestic supplies has also fallen to 13.13% from 14.55%. This decline comes even as the GST base continues to expand, demonstrating that the system is increasingly generating revenue through a broader tax base rather than higher rates. The combination of a lower effective rate, expanding taxable supplies and rising revenues points to a GST system that is capturing more economic activity without relying primarily on higher rates. For businesses and consumers, a lower effective rate means lower tax incidence and greater predictability, while for the government, a widening tax base can help sustain revenue growth without repeatedly raising rates. This shift is particularly significant as GST completes nine years, with the focus moving towards better compliance, wider reporting, invoice-level matching and more efficient administration.
The recovery has been broad-based across India's diverse economic landscape, with reported taxable supplies growing across all 11 sector groups and all major states. As reported by the Finance Minister, reported taxable supplies grew by 25.8% between October 2025 and July 2026 over the corresponding period a year earlier. Reported taxable supplies grew across all 11 sector groups and all major states, with B2C sales rising by 26.7% in the post-reform comparison. This widespread expansion creates opportunities for more businesses to participate in expanding markets and for more communities to benefit from increased demand, investment and employment. The Finance Minister emphasized that tax relief reflected in prices could give households more room to meet other needs or save, while supporting demand for goods and services, with benefits extending through the economy from households to retailers, suppliers and producers.
The recovery pattern reveals significant differences between import-linked and domestic GST revenue sources. In September 2026, GST revenue from domestic transactions rose 10.1% year-on-year to ₹1,37,996 crore, while GST revenue from imports jumped 25.9% to ₹65,525 crore. Over the 12-month period from September 2025 to August 2026, import-linked GST revenue was almost 20% higher compared to the previous year, while domestic GST revenue was around 1% lower than the corresponding period. The Finance Minister highlighted the importance of a national market for small and medium enterprises, noting that businesses in Tier-2 and Tier-3 towns should be able to reach customers beyond their immediate surroundings while continuing to invest and generate employment locally.
The gap between gross and net collections has widened due to increased refund processing. Refunds totalled ₹27,001 crore in September 2026, down 3% from the previous year, while net GST collections rose 10.1%. Over the 12-month period to August 2026, refunds were 20.6% higher than the preceding 12-month period, with their share of gross collections increasing from 12.1% to 13.7%. This increase in refunds has restrained growth in net GST revenue despite the overall recovery. The Finance Minister noted that GST registrations across Central and state jurisdictions stood at approximately 1.71 crore at the end of August, up nearly 15% from a year earlier, while GSTR-3B returns filed by their due dates were 12.6% higher than in the corresponding periods last year for April-July 2026.
