With the end of festival sales and refunds surging, net domestic collection of the Goods and Service Tax in December declined over 5 per cent, data made public on the GST portal showed.
However, a strong growth in Integrated Goods and Services Tax (IGST) collection boosted the overall gross mop-up by 6 per cent.
December collection relates to goods consumed and services availed of in November. Also, now data are released sans the compensation cess, which as done away with on various items except cigarettes, pan masala and tobacco products.
RISE IN REFUNDS
According to data, gross domestic revenue topped Rs. 1.22 lakh crore in December 2025 against Rs. 1.21 lakh crore in December 2024, a growth of 1.2 per cent. During this period, refunds surged over 62 per cent, which led to a de-growth in net collections. “This impact of the GST 2.0 rate reduction explains the net domestic collections de-growing in December. Further, GST 2.0 has created or deepened an inverted duty structure in many sectors like packaging, farming and pharma. All such taxpayers had applied for inverted duty refunds in November and received the same in December, further impacting the GST collections,” said Vivek Jalan, partner at Tax Connect.
However, according to him, it is a fact that the impact of government expenditure on consumption will be seen in the next 6 months to one year, and “GST collections should revive with a bang in FY27.”
Saurabh Agarwal, Tax Partner at EY India, does not see any sign of worry. “In a landscape shaped by structural transitions, we are observing a period of deliberate calibration in revenue. The current moderation in domestic GST collections growth aligns with expectations following the rate rationalisation – a move prioritising long-term tax harmony over immediate gains,” he said.
TOP STATES
Gross collections of GST touched Rs. 1.74 lakh crore in December, a growth of 6.1 per cent. “Strong contributions from Maharashtra, Gujarat, Karnataka and Haryana continue to anchor revenues.” said Manoj Mishra, Partner, Grant Thornton Bharat.
According to Mahesh Jaising, Partner, at Deloitte India, the GST Council’s policies have clearly translated into higher compliance and improved cash flows across sectors. “These trends indicated that even post the GST 2.0 path breaking rate reductions, the tax system continues to mature, demonstrating both elasticity and stability as the economy scales,” he said.
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