India's November GST Slumps to Rs 1.70 Lakh Crore: Weakest in 12 Months - Why This Sharp Drop?

India's GST collections for November 2025 hit a 12-month low of Rs 1.70 lakh crore, up a paltry 0.7% from Rs 1.69 lakh crore in November 2024 and down 13.4% from October’s Rs 1.96 lakh crore, said an article

by Fortune India.This is the first full month reflecting transactions after the sweeping GST 2.0 rate cuts introduced on 22 September 2025, and the numbers are grim:

• Gross domestic revenue fell 2.3% YoY to Rs 1.24 lakh crore
• Compensation cess collapsed 69% YoY to just Rs 4,006 crore (now only on tobacco and pan masala)
• Net GST (after refunds) edged up only 1.3% to Rs 1.52 lakh crore

Year-to-date (April–November FY26) collections are still up 8.9% at Rs 14.75 lakh crore, but November’s near-flat growth has rattled economists.Why the Sharp Drop?Experts point to three big factors:

1. Rate cuts bit harder than expectedThe government slashed rates on 375 items and collapsed slabs from five to four. The hope was that lower prices during Diwali would spark a consumption boom to offset lost revenue. It didn’t happen.Karthik Mani, Partner-Indirect Tax at BDO India:“We expected affordability to drive volume during the festive season, but the gross domestic collections actually fell.”
2. Cess stripped outAerated drinks and motor vehicles are no longer under cess, so the headline number looks even worse when cess is excluded.
3. GDP growth isn’t translating to consumptionQ2 FY26 GDP grew a robust 8.2%, largely on government capex. Private consumption, which drives GST, remains sluggish.Vivek Jalan, Partner at Tax Connect Advisory Services:“GST is a mirror of consumption. GDP is boosted by government spending and investment. When you strip that out, private demand is still weak.”

Inverted Duty Refunds Add PressureNew inverted duty structures in pharma, packaging, and farming have triggered a flood of refund claims filed in November (likely to be paid out in December), further depressing net collections.State-Level Patchwork

• Winners: Arunachal Pradesh (+33%), Maharashtra (+3%), Karnataka (+5%)
• Losers: Mizoram (–41%), Gujarat (–7%), Uttar Pradesh (–7%), Madhya Pradesh (–8%)

The Fiscal WorryThe government had budgeted 9–10% GST growth for FY26. November’s stall means the next four months need to average 12–13% growth just to stay on track. With refunds looming and consumption still soft, the risk of a fiscal deficit overshoot is rising.GST 2.0 delivered lower prices, but the expected “volume boom” never materialised. The economy now has to sprint through the rest of the year to keep the budget math intact.