New Delhi, Dec 1 (PTI) India's Goods and Services Tax (GST) collections slipped to a year-low of Rs 1.70 lakh crore in November, growing at a meagre 0.7 per cent year-on-year on a base lowered by the exclusion of proceeds from cess on sin and luxury goods, the official data released on Monday showed.

While tepid collections were attributed to a major reduction in tax rates on most goods and services, the silver lining was the spurt in consumption across the economy, as evident from the rise in turnover of most companies, giving hope of a multiplier effect of the rate cut in the medium term.

In a major reform aimed at spurring domestic consumption and fireproofing the economy from global trade winds, the government had rationalised GST tax rates to just two rates of 5 per cent and 18 per cent with effect from September 22, from 5, 12, 18 and 28 per cent previously. A separate 40 per cent rate has been fixed on ultra-luxury and demerit goods.

The consumption rise, due to most products being brought into the lower tax bracket and festival buying, helped prop up GST collection in October. November was considered a test month to see how deep the consumption revival was.

Gross GST collections (excluding cess) in November were Rs 1.70 lakh crore against Rs 1.69 lakh crore in the same month last year, according to data released by the government.

Month-on-month, the collections were lower than the Rs 1.96 lakh crore in October 2025. The October collections include compensation cess.

The November 2024 GST collection of Rs 1.69 lakh crore, as the official data cited, excluded Rs 12,950 crore of collections from cess.

With the cess, which was always part of the official GST collection numbers released previously, the November 2024 number was about Rs 1.82 lakh crore.

This, compared to November 2025 proceeds of Rs 1.74 lakh crore (after including cess proceeds of Rs 4,006 crore), was lower by 4.22 per cent.

Effective September 22, GST compensation cess is levied only on tobacco and pan masala, unlike earlier, when it was levied at varied rates on luxury, sin and demerit goods.

Government sources said that cess has not been included in calculating gross GST collections, as compensation cess is now a transitory arrangement till loans taken during the Covid period to compensate states for revenue loss are repaid.

With regard to the November GST revenues, sources said that even though tax collection has come down, the turnover or the value of taxable supplies reported by companies in GST returns has gone up year-on-year.

"The November GST revenue number gives us optimism. The response that the economy has given us in terms of higher taxable supply value, which is a sign of consumption, gives us confidence that the GST reform can be sustained in the short term to give a much bigger multiplier effect in the medium term," a source said.

Gross domestic revenue, which is an indicator of tax revenues from domestic sales, declined 2.3 per cent to over Rs 1.24 lakh crore in November. Gross import revenues grew 10.2 per cent to Rs 45,976 crore.

Refunds dipped 4 per cent to Rs 18,196 crore during November 2025.

After adjusting refunds, net GST revenues in November stood at Rs 1.52 lakh crore, a 1.3 per cent growth year-on-year.

Icra Chief Economist Aditi Nayar said gross GST collections were marginally higher in November 2025, as increased consumption likely offset the impact of the rate cuts across a large number of items.

"However, based on the CGA data, the asking rate for CGST collections during the rest of the year is quite high, and a miss on this account seems inevitable. While we believe that taxes will fall short of the FY2026 BE, higher-than-budgeted non-tax revenues would absorb a part of this shortfall. Overall, we do not expect a material fiscal slippage at the current juncture," Nayar said.

Deloitte India Partner MS Mani noted that the Gross GST collections (excluding cess) have largely remained the same as the same month last year, indicating that the loss on account of rate reductions has been compensated by higher consumption, although not at the expected scale.

"There is wide divergence in the state-wise collections, and a sectoral causative analysis is essential at this stage to enhance the collections with necessary policy measures," Mani said.

While Haryana, Assam and Kerala reported a 17, 18 and 8 per cent growth in GST revenues, respectively, states like Madhya Pradesh and Odisha saw a decline of 17 and 18 per cent.

Uttar Pradesh and Rajasthan saw their revenues decline 4 per cent during November. PTI JD CS JD BAL BAL

GST collections fell to Rs 1.70 lakh crore after rate rationalisation and compensation cess changes, while consumption rose. GST revenues fell to Rs 1.70 lakh crore in November following the move to two primary GST rates and the restriction of compensation cess to tobacco and pan masala, with compensation cess excluded from headline gross GST figures as a transitory measure tied to pandemic era loan repayment; taxable turnover rose year on year, net collections after refunds held at Rs 1.52 lakh crore, and state level and sectoral divergences underline the need for targeted policy responses.