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GST Rate Revision Delivers 5% Revenue Boost for States Amid Reforms

The government's revision of GST rates has successfully increased revenue for states. Collections from September to November grew by 5% compared to the same period last year. This change was part of a broader rate rationalization approved by the GST Council. The reform also included making essential school supplies completely tax-free.

Key Points: GST Rate Revision Yields 5% Revenue Growth for States

  • GST collections grew by Rs 13,005 crore year-on-year from September to November
  • The rate rationalization was recommended by the GST Council in September 2025
  • Gross GST collections saw a 4.2% growth from October to November 2025
  • Rates for school supplies like pencils and notebooks were reduced to nil
2 min read

GST rate revision has resulted in 5 per cent rise in revenue for states: Minister

Minister Pankaj Chaudhary informs Parliament that GST rate rationalization has led to a 5% rise in state revenue collections from September to November.

"The GST collections during September to November of the current financial year have risen to Rs 2,59,202 crore from Rs 2,46,197 crore. - Minister of State for Finance Pankaj Chaudhary"

New Delhi, Dec 16

The revision in GST rates that kicked in from September 22, as part of the economic reforms of the government, have resulted in a 5 per cent growth in the revenue of states (Gross SGST + IGST settled to States) during the period from September to November of the current financial year compared to the same period of the previous financial year, the Parliament was informed on Tuesday.

In a written reply to a question in the Rajya Sabha, Minister of State for Finance Pankaj Chaudhary said that the GST collections during September to November of the current financial year (2025-26) have risen to Rs 2,59,202 crore from Rs 2,46,197 crore in the same period of 2024-25.

The minister also noted that the GST rates are prescribed on the recommendations of the GST Council, which is a constitutional body comprising members from states, UTs, and the Centre. The GST Council, in its 56th meeting held on September 3, 2025, has recommended a comprehensive rate rationalisation and structural simplification of the tax structure. These recommendations have been notified by the Central government with effect from September 22, 2025.

The recent GST rate rationalisation and the government’s continued emphasis on ease of doing business are part of the government’s multi-pronged strategy to boost consumption growth in the economy. The strengthening of consumption demand is expected to have a positive impact on GST revenue. The new GST rates became effective only from September 22, 2025 and the Gross GST collections excluding Compensation Cess from October to November 2025 registered a 4.2 per cent year-on-year growth.

The minister said that the receipts from cesses and surcharges form part of the Consolidated Fund of India and are used to finance the development and welfare measures in the states through various Central government schemes and initiatives.

The minister also explained in answer to another question that the GST rate for pencils, pencil sharpeners, erasers, exercise books, graph books, laboratory notebooks, and notebooks has been reduced to nil.

- IANS

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Reader Comments

R
Rohit P
The numbers look positive on paper, but as a small business owner, the compliance is still a headache. The rate rationalisation is a step, but the real 'ease of doing business' will come when the filing process is simpler for MSMEs. The revenue growth is meaningless if the cost of compliance remains high.
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Aman W
Good to see the GST Council working. A federal structure where states have a say is crucial for India. The 4.2% growth in collections is promising. Now, the key is ensuring this increased revenue is spent effectively on ground-level projects and doesn't get lost in bureaucracy.
S
Sarah B
While the growth is modest, it's a move in the right direction. The structural simplification mentioned is what will have long-term benefits. As someone who analyses economic policies, I'd be keen to see a breakdown of which sectors contributed most to this rise.
K
Karthik V
The reduction on stationery items is a big relief for parents. School expenses are no joke. If the states are getting more revenue, I hope my state prioritises improving government schools. That's where the real development happens. 👍
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Nisha Z
The article says the cess is used for welfare schemes. That's fine, but there needs to be more transparency. We common people should be able to easily see how much money from GST is being spent in our own district or city. Accountability is key.

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