GST collections rise 6.1% in December despite rate cuts; Kerala records 4% growth

Gross goods and services tax (GST) collections rose 6.1 per cent year on year to over ₹1.74 lakh crore in December 2025 in India, even as revenue growth from domestic transactions remained muted following sweeping tax rate cuts.

Government data released on Thursday showed that gross GST revenue in December 2024 stood at over ₹1.64 lakh crore. The latest increase was driven largely by higher collections from imports, while domestic consumption showed only marginal growth.

In Kerala, GST collections continued to expand in December 2025, though the growth rate remained below the national average, reflecting the state’s consumption-led economy and limited import-linked revenues.

The state’s pre-settlement state GST (SGST) stood at about ₹1,236 crore, marking a 4 per cent rise over December 2024. This is higher than the national growth rate of 2 per cent. After the settlement of integrated GST (IGST), Kerala’s post-settlement SGST share was around ₹2,643 crore, also up 4 per cent year on year. 

While positive, Kerala’s SGST growth was lower than the all-India post-settlement SGST growth of about 6 per cent, pointing to a relatively moderate pace of expansion.

For the April–December period of 2025–26, Kerala’s pre-settlement SGST collections rose 7 per cent to ₹11,704 crore, but post-settlement receipts increased only 3 per cent to ₹25,001 crore. The narrowing growth after settlement highlights Kerala’s smaller share of import-linked IGST compared with larger manufacturing and trading states.

SGST is the GST collected by a state government on sales within the state. IGST is levied on inter-state trade and imports and is first collected by the Centre. It is later shared with states. Pre-settlement SGST refers to the tax a state earns directly from its own sales, while post-settlement figures reflect the final amount received after IGST distribution.

Across states, post-settlement SGST growth showed wide divergence. Haryana (21%) and Assam (19%) recorded double-digit growth, while Maharashtra (13%) and Gujarat (9%) also posted strong gains. Kerala’s performance was outpaced by Tamil Nadu, which recorded 8 per cent growth, and Karnataka at 5 per cent. However, Kerala fared better than West Bengal, which saw zero growth, and Uttar Pradesh, which recorded a 1 per cent decline.

At the national level, gross GST revenue from domestic transactions rose just 1.2 per cent to over ₹1.22 lakh crore in December 2025. In contrast, revenue from imported goods jumped 19.7 per cent to ₹51,977 crore, underlining the growing role of imports in supporting overall GST collections.

Refunds increased sharply by 31 per cent to ₹28,980 crore during the month. As a result, net GST revenue, after adjusting for refunds, stood at over ₹1.45 lakh crore, registering a 2.2 per cent year-on-year rise.

Cess collections fell sharply to ₹4,238 crore, compared with ₹12,003 crore in December 2024.

Effective September 22, 2025, GST rates on about 375 items were reduced, making several goods cheaper for consumers. In addition, the compensation cess is now levied only on tobacco and related products, instead of a wider range of luxury and demerit goods earlier. These measures have had a direct impact on GST revenue growth, particularly from domestic transactions.