India’s GST (goods and services tax) collection recorded a 6.1 per cent increase to Rs 1,74,550 crore in December 2025 compared to Rs 1,64,556 crore the same month of the previous year, reflecting the increase in economic activity during the month, official figures released on Thursday showed.
Central GST collections rose to Rs 34,289 crore, state GST collections to Rs 41,368 crore, and integrated GST collections to Rs 98,894 crore. The government raised Rs 4,551 crore via the GST compensation cess, which is continuing only as a transitory arrangement till the entire loan and interest liability are settled. The full-year collection was Rs 88,385 crore, compared to Rs 1.1 lakh crore in 2024.
While there are new higher GST slabs like 40 per cent for luxury items, the cess continues on tobacco and pan masala. Total GST refunds in December amounted to Rs 28,980 crore, compared with Rs 22,138 crore in the same month of the previous year.
The GST collection has registered a growth despite the cut in tax rates that kicked in on September 22, as this has resulted in an increase in the demand for goods and services by consumers, leading to an increase in economic activity. Meanwhile, the Finance Ministry on Thursday also issued a series of notifications that would bring into effect the new tax regime for tobacco products from February 1, 2026.
It was notified that the Central Excise (Amendment) Act, 2025, passed in the recently-concluded Winter session of Parliament, would come into force from February 1, 2026. This Act specifies new rates of excise duty on tobacco products. It also notified that the provisions of the Health Security Se National Security Act, 2025, which currently levies a cess on the manufacture of pan masala, will come into force from February 1, 2026
The ministry also released an FAQ list to explain that, under the Goods and Services Tax regime, the excise duty on cigarettes had so far been rendered a nominal amount of a “fraction of a paisa” per cigarette stick, and that the GST compensation cess rate on tobacco products had not been increased since it was implemented in July 2017.
