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Indias Gross GST collections for the month of November stood at Rs 1,70,276 crore, up 0.7% year on year. GST collection was over Rs 1.69 lakh crore in November 2024. Gross domestic revenues declined 2.3 per cent to over Rs 1.24 lakh crore.
One needs to understand a bit of economics to understand the muted GST Consumptions in the backdrop of a robust GDP tailwind.
GDP Formula in Economics -
GDP = C+I+G+(X-M)
C = Consumption
I = Investment
G = Government Spending
X = Exports
M = Imports
GST collections Formula in Economics -
GST collections = F(Consumption).
To simplify the economics formulae, GST Collections is a function of the consumption in the Economy, whereas GDP is a function of Government Expenditure, Investment and trade surplus also alongwith consumption.
The increase in GDP by 8% for H1 of 2025-26 had a major component of increased Government expenditure which, when discounted, gives a muted GST Collection. Furthermore, is the impact of GST 2.0 rate reduction. This explains a Gross GST collections increase of only 0.7% In November 2025 in the backdrop of a robust GDP growth of 8% for H1 of 25-26. Hence, it seems that the Economy has some work to do in the balance part of the year to keep the Fiscal Deficit in check.
It is also important to note that as we had forecasted last month, GST 2.0 has created or deepened an inverted duty structure in many sectors like packaging, farming, pharma, etc. All such taxpayers have applied for inverted duty refunds in November 2025. These refunds would be sanctioned in December 2025 in all probability and hence the increase in consumption has to balance this impact too going forward to continue the GST bandwagon.
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