GST Growth Faces Challenges Amid Tax Cut Impact

GST collections rose 6.1% in December 2025 to over Rs 1.74 lakh crore. While domestic transaction revenues grew by 1.2%, imports surged by 19.7%. Despite sweeping tax cuts to two rates of 5% and 18%, growth has slowed. States like Maharashtra and Karnataka bucked negative growth trends observed in others.

In December 2025, the Gross GST collections saw a 6.1% rise to surpass Rs 1.74 lakh crore, with data emphasizing the revenue slowdown from domestic transactions amid sweeping tax reductions.

The government slashed GST rates on 375 items to two rates of 5% and 18%, influencing revenues. Yet, domestic transaction revenues grew by just 1.2% over the month, alongside a 19.7% increase from imports.

While states like Maharashtra and Karnataka provided solid revenue anchors, 17 states experienced declining GST collections. Experts, including Deloitte's MS Mani, expressed concern over negative growth in key regions. Still, the gross collection's 6.1% growth indicates businesses' volume growth compensating for decreased rate impacts.

(With inputs from agencies.)