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NEW DELHI, Nov 2: India’s Goods and Services Tax (GST) collections recorded their strongest growth so far in the current financial year, reaching Rs 2.31 trillion in October, as higher import related revenues, sustained economic activity and improved tax compliance strengthened government receipts.

According to provisional figures released by the Finance Ministry on Sunday, gross GST collections increased 22.9 per cent year on year in October. After adjusting for refunds, net revenue rose 25.6 per cent to Rs 2.03 trillion, representing the highest growth rate recorded during FY27.

The latest performance marks a significant improvement over October last year, when net GST revenue increased by just 0.6 per cent. The comparatively weaker growth in the corresponding period of 2025 was partly influenced by expectations surrounding a major reduction in GST rates and the subsequent implementation of the changes during the fourth week of September.

October’s collections also reflected a substantial contribution from international trade, with taxes collected on imported goods increasing considerably faster than revenue generated from domestic transactions.

Gross GST collections crossed the Rs 2 trillion threshold for the fourth time during the first seven months of the current financial year. The previous instances were recorded in April, July and September. Net collections also crossed this level for the second time, following April’s performance.

In absolute terms, October’s gross and net collections were the second-highest monthly figures recorded during FY27, behind April’s respective totals of Rs 2.42 trillion and Rs 2.10 trillion.

The latest figures indicate that government revenue mobilisation has maintained a strong trajectory despite fluctuations in domestic economic activity and uncertainty in the international business environment.

Import-related Revenue Provides Major Boost

A significant contribution to October’s performance came from integrated GST collected on imported goods.

Gross import-linked IGST increased 42.2 per cent year-on-year to Rs 72,246 crore, accounting for nearly one-third of the overall collections. After adjusting for refunds, net GST revenue from imports rose 56.2 per cent to Rs 58,319 crore.

The figures demonstrate the growing contribution of international trade to India’s indirect tax revenues.

Domestic GST collections also registered healthy growth, although their expansion remained slower than that of import-related receipts.

Gross domestic GST revenue increased 15.8 per cent to Rs 1.59 trillion in October, while net collections rose 16.4 per cent to Rs 1.45 trillion.

The difference in growth rates between domestic and import-linked collections highlights the importance of international trade in supporting the government’s tax revenues.

Saurabh Agarwal, tax partner at EY India, said the continued strength in import-related collections underlined the importance of developing domestic manufacturing capabilities.

He also suggested that the government could review production-linked incentive schemes, particularly in sectors where allocated funds remain underutilised, to improve their effectiveness and support the objective of building a stronger domestic industrial base.

The production-linked incentive programme has been introduced to encourage manufacturing investment, expand industrial capacity and reduce dependence on imported products across selected sectors.

Strengthening local production could help India improve its competitiveness while supporting employment generation and export growth.

GST Reforms and Refund Measures

Recent decisions taken by the GST Council are also expected to support industrial activity and improve the tax framework.

Changes relating to input tax credit provisions and refunds for input services and capital goods under inverted duty structures are aimed at addressing difficulties faced by businesses.

These measures are expected to improve working capital availability for companies, reduce the accumulation of unutilised tax credits and support investment decisions.

Refunds increased 6.5 per cent to Rs 27,934 crore in October compared with Rs 26,225 crore in the corresponding month last year.

Domestic refunds rose 9.8 per cent to Rs 14,007 crore, while refunds associated with exports through the Indian Customs Electronic Data Interchange Gateway (ICEGATE) increased 3.4 per cent to Rs 13,927 crore.

Faster and more predictable refund processing is considered important for exporters because delayed payments can affect their cash flow and operational requirements.

Abhishek Jain, partner and national head of indirect tax at KPMG in India, said the latest figures reflected sustained economic activity, improved compliance and resilience in the country’s consumption and trade ecosystem.

He described the October performance as a positive indication of revenue mobilisation and the increasing maturity of India’s GST framework.

Cumulative Collections Maintain Growth

The cumulative figures for the first seven months of FY27 also showed continued improvement in tax collections.

Between April and October, gross GST revenue increased 13.2 per cent to Rs 14.78 trillion compared with Rs 13.05 trillion during the corresponding period of the previous financial year.

Net GST collections during the same period rose 12.6 per cent to Rs 12.69 trillion against Rs 11.27 trillion recorded a year earlier.

Import-related revenue continued to outperform domestic collections during the seven-month period.

Gross GST revenue from imports increased 29.3 per cent to Rs 4.44 trillion, while net collections from the segment rose 34.1 per cent to Rs 3.54 trillion.

By comparison, gross domestic GST collections grew 7.4 per cent to Rs 10.33 trillion, while net domestic revenue increased 6 per cent to Rs 9.15 trillion.

The figures indicate that although domestic transactions continue to account for the larger share of overall GST receipts, international trade has contributed disproportionately to the recent growth.

State-Level Performance and Economic Outlook

The latest revenue figures also indicated broad-based improvements across several states and Union Territories.

Rajasthan, Bihar, Manipur, Mizoram, Assam, Meghalaya, Jharkhand and Madhya Pradesh were among the regions highlighted for their contribution to the improved collections. Jammu and Kashmir also featured among the regions reporting positive growth.

The performance across different parts of the country suggests that revenue mobilisation is not limited to a small number of major industrial and commercial centres.

The festival season is expected to provide additional support to collections in the coming months as consumer spending, retail transactions and business activity generally increase during this period.

However, maintaining the current growth momentum will depend on continued domestic demand, international trade activity and effective implementation of tax compliance measures.

Businesses are also expected to strengthen their documentation, reporting and reconciliation procedures to avoid discrepancies and ensure timely compliance with GST requirements.

The October figures provide an encouraging indication of India’s revenue position during the current financial year. Nevertheless, the substantial difference between import-linked and domestic collection growth highlights the importance of strengthening local production and expanding the country’s manufacturing base.

As the government continues to introduce improvements to the indirect taxation system, the focus will remain on balancing higher revenue mobilisation with a simpler compliance environment for businesses.