Govt revenue falls 4.2% in November after GST cuts

India collected 1.70 trillion rupees ($18.98 billion) in gross goods and services taxes in November, about 0.7 per cent higher than a year earlier.

Including cess imposed on various goods and services, which was previously reported as part of the gross collections, government revenue fell 4.2 per cent, the data showed.

Tax collection data for November, which reflects sales in October, was watched closely after the Narendra Modi government slashed taxes on hundreds of consumer items to boost demand. Increased purchases from consumers would help balance the impact of the lower taxes, the government said at the time.

It was hoped that the increase in volume of purchases would offset the drop in revenue due to GST rate reductions, said Karthik Mani, partner - indirect tax at BDO India.

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“Instead, there is a reduction in the gross domestic GST collections,” he said.

After refunds, the government’s net tax collections were 1.52 trillion rupees, about 1.3 per cent higher than in November 2024.

India reduced taxes on hundreds of goods including shampoo and small cars from September 22. The country reports consumption tax data with a lag, and November was the first month to reflect the full impact of the tax cuts on government revenues.

($1 = 89.5900 Indian rupees)

(This is an agency story. Except for the headline, the story has not been edited by Firstpost staff.)