At Rs 1.79 lakh crore, GST revenue growth back in positive zone in December, Pg12

Key Highlights:

• Gross GST collections reached Rs 1.79 lakh crore in December 2025, a 1.3% year-on-year increase.
• Excluding compensation cess, December GST revenues rose 6.1% year-on-year to Rs 1.75 lakh crore.
• Domestic market tax collections increased by 1.2% in December, while IGST from imports surged 19.7%.
• GST refunds increased by 30.9% to Rs 28,980 crore in December 2025.
• Net GST collections (excluding cess) rose 2.2% year-on-year to Rs 1.46 lakh crore.
• GST rates were reduced on about 375 items effective September 22.
• The GST Council streamlined rates to 5% and 18%, with a 40% rate for ultra-luxury and demerit goods.

Detailed Insights:

• The GST revenue growth indicates a recovery after tax rate cuts implemented on September 22, impacting about 375 items.
• November 2025 saw a 4% decline in GST revenues due to the full-month impact of the GST rate cuts.
• The compensation cess is a temporary measure ending on January 31, after loan and interest liabilities are cleared.
• The government rationalized GST rates, moving from 5%, 12%, 18%, and 28% to primarily 5% and 18%.
• Compensation cess is now mainly on tobacco products, unlike the previous broader application on luxury, sin, and demerit goods.
• Strong performance in regions like the Northeast and Odisha suggests increased consumption and development.
• The rise in IGST indicates higher import activity, contributing significantly to overall GST revenues.

Key Concepts Involved:

• Goods and Services Tax (GST): An indirect tax levied on the supply of goods and services.
• Integrated GST (IGST): Tax levied on inter-state supply of goods and services, as well as imports.
• Compensation Cess: A levy to compensate states for revenue losses arising from the implementation of GST.