India's GST Revenue Climbs to Three-Month Peak in January 2026
India's gross Goods and Services Tax (GST) collections witnessed a significant upswing in January 2026, rising by 6.2 per cent to reach a three-month high of over ₹1.93 lakh crore. This rebound indicates that increased consumer spending is effectively compensating for the tax rate reductions implemented in late 2025, according to official sources.
Net GST Revenues Show Strong Growth
While gross collections soared, refunds experienced a slight decline of 3.1 per cent to ₹22,665 crore. This reduction in refunds contributed to net GST revenues growing at an even more impressive rate of 7.6 per cent, amounting to approximately ₹1.71 lakh crore for the month. The data underscores a resilient fiscal performance amidst structural tax reforms.
Breakdown of Domestic and Import Revenues
A detailed analysis reveals that gross tax collections from domestic transactions increased by 4.8 per cent to ₹1.41 lakh crore. Concurrently, import revenues demonstrated stronger growth, surging by 10.1 per cent to ₹52,253 crore in January. This dual growth highlights balanced economic activity across sectors.
Impact of September 2025 Tax Rate Rationalization
The current revenue trajectory follows major GST reforms effective from September 2025, which included:
- Rate reductions on approximately 375 items, making everyday goods more affordable for consumers.
- Consolidation of the four primary tax slabs (5%, 12%, 18%, and 28%) into two simplified rates of 5 per cent and 18 per cent.
- Introduction of a highest slab of 40 per cent for select ultra-luxury goods and tobacco products.
Initially, these changes led to a dip in collections, with revenues falling to ₹1.70 lakh crore in November 2025. However, a recovery was evident by December, with collections rising to ₹1.74 lakh crore, culminating in the January peak of ₹1.93 lakh crore. This figure is now closer to the October 2025 collections of about ₹1.96 lakh crore, signaling a return to pre-reform revenue levels.
Expert Insights on Consumption and Policy Efficacy
M S Mani, Partner at Deloitte India, commented, "The gross GST collections have grown by 6.2 per cent despite the significant rate reductions since September 2025. This indicates that increased consumption is more than making up for the rate reductions, as rightly anticipated by policymakers." He added that while many large states continue to show only single-digit growth in GST collections, there is a noticeable improvement from the past three months, where some states reported increases below 5 per cent.
Saurabh Agarwal, Tax Partner at EY India, noted, "The consistent revenue trajectory suggests that policy resets, like the September 2025 rate rationalisation, are successfully formalising the economy. This insulates us from global headwinds while laying the groundwork for a robust, export-led GST expansion."
Cess Collections and Year-to-Date Performance
Cess collection, primarily from tobacco products, stood at ₹5,768 crore in January 2026. This marks a significant decrease from ₹13,009 crore in January 2025, when cess was levied on a broader range of luxury, sin, and demerit goods, including automobiles and tobacco.
For the fiscal period from April 2025 to January 2026, cumulative gross GST collections amounted to ₹18.43 lakh crore. This reflects a year-on-year growth of 8.3 per cent, broadly aligning with nominal GDP growth and indicating stable economic expansion.
The January 2026 GST data not only highlights a recovery in tax revenues but also points towards sustained consumption momentum and the effective adaptation of businesses and consumers to the simplified tax structure. As India navigates post-reform adjustments, these figures offer optimism for continued fiscal stability and economic resilience.
