Archive · 2 Nov 2025
GST Collections Decline in 20 Indian States Amidst Economic Factors
Imagine a big sale in India where people pay taxes called GST on things they buy.
In October, many states saw their tax money go down by almost a quarter.
This happened because people were waiting for prices to drop after a tax cut at the end of September, so they waited to buy things or bought them in October.
Also, some people didn't buy as much in the first few weeks of September.
Even though some states collected less tax, experts think the total tax money for the whole year will still be more than they expected.
They believe that as people buy more things in November because of festivals and lower prices, the tax collection will go up again.
Some states that thought they would lose a lot of tax money actually gained some.
Twenty out of 36 Indian States and Union Territories saw a decline in GST collection by up to 24% in October.
Key states like Delhi, West Bengal, and Rajasthan experienced a drop in GST revenue.
The decline is attributed to muted demand in early September and the impact of tax rate reductions effective late September.
Despite the dip in some regions, overall GST revenue for FY26 is projected to exceed budget estimates.
States like Karnataka, Punjab, and Telangana showed positive GST collection growth in October compared to the previous year.
- Who
- 20 out of 36 Indian States and Union Territories, SBI economists, GST Council
- What
- Experienced a decline in GST collection up to 24% in October, impacting overall domestic growth to 2%.
- When
- October 2025
- Where
- 20 States and Union Territories in India
- Why
- Muted demand in early September and postponed discretionary purchases, alongside rate reductions effective late September.
States Expressing Concern
SBI Report Projections
Perceived Decline in GST Revenue
States Expressing Concern
Some states expressed apprehension about a perceived decline in GST revenue following tax rationalization.
SBI Report Projections
SBI's report, 'The Loss That Never Was,' refutes these apprehensions, projecting overall GST revenue for FY26 to be higher than budgeted estimates.
Specific State Revenue Estimates vs. Reality
States Expressing Concern
Karnataka estimated a monthly decline of ₹7,083 crore, and West Bengal estimated a decline of ₹1,667 crore.
SBI Report Projections
In October 2025, Karnataka saw a 10% gain, West Bengal had a marginal 1% decline, and Kerala had a 2% decline, suggesting actual outcomes differed from initial estimations.
- States/UTs with Declining GST Collection (October)
- 20 out of 36
- Maximum Decline Percentage
- 24%
- Overall Domestic GST Collection Growth (October)
- 2%
- Projected FY26 GST Revenue
- Higher than budgeted estimates
- Karnataka GST Change (Oct 2025 vs Oct 2024)
- +10%
- West Bengal GST Change (Oct 2025 vs Oct 2024)
- -1%
- Kerala GST Change (Oct 2025 vs Oct 2024)
- -2%
- Punjab GST Change (Oct 2025 vs Oct 2024)
- +4%
Sources
India's GST collections grows 4.6% to ₹1.96 lakh crore in October despite tax cuts
Gross GST collections rise 4.6 pc to Rs 1.96 lakh crore in festive month of October
October GST receipts up 4.6% on year
DEEP-DIVE: GST collections rise 4.6% in Oct; experts see robust consumption but warn of emerging risks
GST collection grows at slower pace of 4.6% in October
GST Collections Rise 4.6% To Rs 1.96 Lakh Crore In October
After rate cuts, GST collections up 4.6% YoY at Rs 1.96 lakh crore in October
GST cut, festival dhamaka: Bank credit doubles as demand for auto, white goods, housing jumps in Sept-Oct
GST revenue in FY26 to exceed budget estimates, says SBI Research
Diwali dhamaka: TG sees 10% upswing in Oct GST mop-up
Indian auto sales jump in October, Maruti Suzuki, Tata Motors sales surge over 8% — what's fueling the consumer demand?
GST rate rationalisation delivers gains, not losses: SBI Research busts forecasts of revenue hit
SBI report projects higher GST revenue than expected for FY26
Andhra Pradesh’s net GST collections up 8.77% to ₹3,021 cr in October
GST cut: Chandigarh adds nearly 10,000 new vehicles this festive season
GST collection in 20 out of 36 States, UTs down 24% in Oct
