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Key Points

India's Goods and Services Tax collections have shown remarkable resilience, rising 6.5% in August to Rs 1.86 lakh crore. The consistent performance reflects growing economic activity and positive business sentiment. Morgan Stanley has expressed optimism about India's economic trajectory, revising the GDP growth forecast upwards. The government is also exploring potential GST rate rationalizations to further stimulate economic growth.

Key Points: India GST Collections Rise 6.5% Amid Economic Optimism

  • GST collections maintain steady growth above Rs 1.8 lakh crore
  • Morgan Stanley raises India's GDP growth forecast to 6.7%
  • Government considers two-slab GST rate structure
  • Tax collections strengthen macroeconomic fundamentals
2 min read

India's GST collections rise 6.5 pc in Aug to Rs 1.86 lakh crore

India's August GST collections hit Rs 1.86 lakh crore, signaling robust economic growth and potential policy shifts

"We expect impending GST tax cuts to provide a fillip to domestic demand - Morgan Stanley Report"

New Delhi, Sep 1

India's Goods and Services Tax (GST) collections rose by 6.5 per cent to Rs 1.86 lakh in August, government data released on Monday showed.

GST collections have been rising steadily to remain above the Rs 1.8 lakh crore mark for the eighth month in a row, reflecting the growing economic activity in the country.

The gross domestic revenue grew 9.6 per cent to Rs 1.37 lakh crore, while tax from imports dipped 1.2 per cent to Rs 49,354 crore in August. GST refunds were down 20 per cent year-on-year to Rs 19,359 crore.

Net GST revenue stood at Rs 1.67 lakh crore in August 2025, recording 10.7 per cent year-on-year growth.

The data has been released just ahead of the meeting of the GST Council, comprising the Centre and states, which will deliberate on introducing a two-slab GST rate of 5 and 18 per cent on most goods, while a separate higher 40 per cent tax will be levied on sin goods such as cigarettes, tobacco, and sugary drinks as part of the rationalisation exercise.

Buoyant tax collections in recent months have helped to strengthen the country's fiscal position and the macroeconomic fundamentals, which help to ensure stable growth.

Meanwhile, global investment bank and financial advisory firm Morgan Stanley has raised its forecast for India's GDP growth in 2025-26 on the back of the robust 7.8 per cent growth in the April-June quarter and expects the forthcoming cuts in GST to spur domestic demand, which would offset the decline in exports due to the US tariff hike.

"We expect impending GST tax cuts, the upcoming festive season and strong trends in rural demand to provide a fillip to domestic demand. As such, we expect the composition of growth to change with public spending softening, external demand weakening (mainly goods exports) and private sector demand picking up," it said in a report.

"We estimate that the incremental drag from external demand at around 50 basis points (bps) could potentially be offset from likely GST cuts, which could boost growth by about 50bps," it observed.

For the financial year 2025-26, Morgan Stanley has revised its real GDP growth upwards to 6.7 per cent year-on-year from 6.2 per cent projected earlier.

- IANS

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Reader Comments

P
Priya S
While the numbers look impressive, I hope the government considers simplifying the GST structure further. The current multiple slabs create compliance headaches for small businesses like mine. The proposed two-slab system sounds promising!
A
Aditya G
The 40% tax on sin goods is a smart move! Cigarettes and sugary drinks should be taxed heavily - they burden our healthcare system. Hope the revenue is used for public health initiatives. 👍
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Sarah B
As someone working in the export sector, I'm concerned about the dip in import tax collections. The US tariff hike is definitely affecting us. Hope the GST cuts and festive season boost domestic demand as Morgan Stanley predicts.
Karthik V
Eighth consecutive month above ₹1.8 lakh crore! This is fantastic news for our fiscal health. The revised GDP growth forecast of 6.7% shows international confidence in India's economy. Let's keep this momentum going through the festive season! 🪔
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Nisha Z
While the overall numbers are positive, I hope the government ensures that the benefits of this economic growth reach the common people. Lower inflation and better job opportunities should be the focus now.

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