Archive · 7 Nov 2025
India's October GST Revenue Rises, But Several States See Revenue Contraction
India has a special tax called GST that replaced many old taxes.
In October, the government collected more money from this tax than it did last year, partly because people were buying more things for festivals like Diwali.
Five big states like Maharashtra and Gujarat are the main places where this tax money comes from.
However, the news also showed that one-third of India's states and territories actually collected less GST money in October compared to last year.
Some experts have also found that overall, the GST tax system hasn't brought in as much money for the government as the old taxes did before GST was created.
This means some states are not getting as much money as they used to.
While some states like Mizoram and Meghalaya are doing better with GST than before, states like Punjab and Odisha have seen the biggest drop in their tax money.
India's GST revenue in October 2025 reached Rs 1,95,936 crores, a 4.6% increase from October 2024, partly due to festive spending.
Major states including Maharashtra, Karnataka, Gujarat, Tamil Nadu, and Haryana accounted for over 40% of the total GST revenue.
Despite overall growth, 20 states and union territories experienced a contraction in their GST revenues in October.
Analysis suggests that total GST revenues as a percentage of GDP are lower than the combined revenues from taxes subsumed under GST.
Several states, particularly in the North-East, showed improved GST revenue to GSDP ratios, while others like Punjab and Chhattisgarh saw significant drops.
- Who
- Government of India and various Indian states
- What
- Release of October Goods and Services Tax (GST) collection data, showing an overall increase but a contraction in many states.
- When
- October 2025 (data released November 3rd)
- Where
- India
- Why
- Overall GST revenue increase attributed to festive spending; state-level variations due to differing economic conditions and the impact of the GST regime compared to pre-GST taxes.
Revenue Growth Factors
Revenue Contraction Factors
Overall GST Revenue vs. Pre-GST
Revenue Growth Factors
India's total GST revenue in October 2025 increased by 4.6% compared to October 2024, boosted by festive spending.
Revenue Contraction Factors
An analysis shows that aggregate revenue from taxes subsumed under GST has declined as a percentage of GDP since its introduction in 2017. Many states have complained that GST revenues are lower than under the previous tax system.
State-Level Performance
Revenue Growth Factors
Maharashtra, Karnataka, Gujarat, Tamil Nadu, and Haryana contributed over 40% of the total GST revenue, indicating their importance as economic hubs. Five states (Mizoram, Nagaland, Sikkim, Meghalaya, and Manipur) saw improvements in their GST revenue to GSDP ratios compared to the pre-GST regime.
Revenue Contraction Factors
As many as 20 states and union territories experienced a contraction in their GST revenues in October. Punjab, Chhattisgarh, Karnataka, Madhya Pradesh, and Odisha witnessed the largest drops in their revenue from subsumed taxes as a percentage of GSDP.
Impact on States' Finances
Revenue Growth Factors
Some industrial and service-oriented states reported significant growth in GST collections.
Revenue Contraction Factors
The PRS analysis indicates that in the seven years of GST, the average State GST (SGST) as a percentage of GDP has been below the average subsumed taxes in the four full years before GST, suggesting many states are financially worse off.
- October 2025 GST Revenue
- Rs 1,95,936 crores
- Year-on-Year GST Revenue Growth (October)
- 4.6%
- States Contributing Over 40% GST Revenue
- Maharashtra, Karnataka, Gujarat, Tamil Nadu, Haryana
- States with Revenue Contraction (October)
- 20 states and union territories
- GST Revenue as % of GDP (2023-24)
- 5.5%
- Pre-GST Revenue as % of GDP (2015-16)
- 6.5%
- Estimated Medium-Term GST-to-GDP Ratio (15th Finance Commission)
- 7%
