Andhra Pradesh Posts Impressive 6.72% GST Growth in January 2026 Despite Tax Rate Reductions
In a remarkable display of economic resilience, Andhra Pradesh has registered a significant 6.72% increase in net Goods and Services Tax (GST) collections for January 2026, officials confirmed from Vijayawada. This growth comes despite the implementation of widespread GST rate reductions and tax withdrawals under the landmark GST 2.0 reforms that have reshaped India's indirect tax landscape.
Record-Breaking Collections Amidst Challenging Reforms
Net GST collections for the state reached an impressive Rs 3,073 crore in January 2026, marking the highest ever collection for the month since the GST regime was introduced in 2017. These revenues correspond to transactions undertaken during December 2025, reflecting robust economic activity during the holiday season.
Chief Commissioner of State Taxes, Babu A, explained the achievement to TOI: "The growth was accomplished despite lower tax rates on major consumer essentials, durables, pharmaceuticals, automobiles, and cement, along with the withdrawal of GST on life and medical insurance that took effect from September 22, 2025. Increased consumption following these rate cuts, combined with stronger compliance measures and focused enforcement, helped sustain revenue growth, making January 2026 the best-performing January in the GST era."
Sustained Growth Trajectory and Regional Standing
For ten consecutive months from April 2025 to January 2026, Andhra Pradesh's net GST collections have consistently exceeded those recorded in the corresponding months of the previous financial year, indicating steady and sustained economic activity across the state.
When compared specifically to January 2025, the state's 6.72% growth in net GST collections notably outperformed the national average growth of 5.80% (excluding imports). Among southern states, Andhra Pradesh secured a strong second position after Karnataka (7.23%), placing ahead of Kerala (5.69%), Tamil Nadu (4.86%), and Telangana (4.74%).
Detailed Revenue Breakdown and Performance Metrics
Gross GST collections for January 2026 stood at ₹3,479 crore. While this reflected a 3.46% decline compared to January 2025, primarily due to rate cuts and the withdrawal of Compensation Cess on most items except tobacco, the decline was only 0.21% when cess was excluded from calculations. This minimal reduction highlights the underlying resilience of the state's tax base.
A particularly encouraging aspect of Andhra Pradesh's performance is that this growth was achieved from a relatively modest base, reflecting consistency rather than volatility in revenue generation. This stands in contrast to states like Odisha, which recorded a sharp 9.67% decline during the same period.
Component-Wise Growth and Supporting Revenues
Breaking down the GST components, state GST collections rose to ₹1,284 crore, posting a substantial 8.37% year-on-year increase. Meanwhile, Integrated GST (IGST) settlement reached ₹1,788.79 crore, reflecting a 5.57% growth compared to January 2025.
Officials attributed the higher IGST settlement to multiple factors including intensified scrutiny of ineligible input tax credit claims in exempt transactions, timely reversals of such claims, and higher inflow of goods and services for consumption within the state.
Beyond GST, petroleum VAT continued to provide significant revenue support with collections of ₹1,490 crore, marking a 7.09% rise over the previous year. Professional Tax collections surged an impressive 25.60% in January alone, while cumulative collections up to January 2026 grew by 43.50%, reflecting both expansion of the tax base and improved enforcement mechanisms.
Comprehensive Revenue Picture and Strategic Initiatives
Overall, total collections across all tax sectors touched ₹4,704 crore in January 2026, registering a solid 7% growth over ₹4,396 crore collected in January 2025. Cumulatively, collections up to January 2026 stood at ₹44,221 crore, representing a 4.79% year-on-year increase.
Babu highlighted the strategic initiatives behind this performance: "Sustained use of data analytics, AI-based compliance monitoring, targeted audits, tighter coordination with central agencies, stricter return-filing enforcement, and swift recovery from defaulters have collectively helped reverse the early fiscal slowdown. These measures have placed Andhra Pradesh on a stable, upward revenue trajectory under the GST regime."
The January 2026 performance demonstrates how Andhra Pradesh has successfully navigated the challenges posed by GST 2.0 reforms through a combination of consumption growth, technological interventions, and robust compliance frameworks.
