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Grew 6.5% vs. 7.5% in Jul’25

* India’s GST collections for Aug’25 reached INR1.86t (vs. INR1.96t in Jul’25 and INR1.75t in Aug’24), marking a 6.5% YoY increase—lower than last month (7.5% YoY in Jul’25) and lower than the growth recorded in Aug’24 (10.3% YoY). The moderation (vis-à-vis Aug’24) was mainly led by a contraction in GST collections on imports and a moderation in the growth of IGST collections. (Exhibit 1).

* In Aug’25, CGST collections amounted to INR340.8b (up 10.4% YoY in Aug’25 vs. 8.9% YoY in Aug’24), and SGST collections stood at INR428.5b (up 11.6% YoY in Aug’25 vs. 7.3% in Aug’24). IGST collections amounted to INR971.9b (up 3.8% YoY in Aug’25 vs. 12.5% YoY in Aug’24; Exhibit 2).

* GST collected on domestic activities grew at a three-month high of 9.7% in Aug’25 vs. 9% in Aug’24. On the other hand, GST collected on imports contracted 9.8% YoY to INR493.5b in Aug’25 vs. growth of 12.6% YoY in Aug’24. GST collected on domestic transactions constituted 76% of the total GST receipts in FYTD26 vs. 76.6% in FYTD25 and 76.4% in FY25 (Exhibit 3).

* GST collections for Apr-Aug’25 totaled INR9.1t, registering a 9.9% increase over the same period last year—suggesting a stable fiscal position going into the first half of FY26.

* For FY26, the GoI has budgeted a growth of 11%, implying GST receipts of INR24.5t or monthly receipts of INR2.0t (Exhibit 4). We believe the FY26BE target is achievable. GST collections in FY26 are expected to remain strong, supported by steady economic growth, better tax compliance, and increased formalization of businesses. Import-led tax buoyancy, expanding digital footprint (e-invoicing, AI audits), and reduced evasion are expected to drive revenues further.

* However, the new GST structure announced could be mildly negative for fiscal balances in the short run but has the potential to turn neutral or even positive in the medium term through higher consumption, better compliance, and reduced disputes.

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