NEW DELHI: Central and state governments collected ₹1.61 trillion in Goods and Services Tax (GST) in February after refunds, marking a 7.9% year-on-year increase, official data released on Sunday showed.
The figure excludes GST compensation cess proceeds of more than ₹5,000 crore received during the month. The cess was discontinued from 1 February after tobacco–the only commodity still attracting it following GST rationalization in September 2025–was moved into a new tax regime. The cess collection booked in February relate to sales in the previous month.
Gross GST collections before adjusting for refunds stood at ₹1.84 trillion, up 8.1% from a year earlier, excluding compensation cess, the data showed.
Businesses received refunds worth ₹22,595 crore in February, with more than half going to exporters.
Till the end of February, net GST collections of central and state governments, excluding cess proceeds, stood at ₹17.46 trillion, reflecting a 6.9% annual increase.
Cess proceeds are being accounted for separately to enable a fair comparison with last year’s revenue collection, as this source has now been phased out.
The government has maintained that GST rate cuts announced in September last year would boost demand for goods and services and, over time, support higher tax collections.
Data released by the statistics ministry on Friday showed that household spending, or private final consumption expenditure, the biggest driver of growth, witnessed a sharp growth of 8.7% in the December quarter (Q3) of FY26, faster than the 8% seen in the September quarter, and also higher than the 6% seen in Q3FY25.
The 7.8% economic growth estimated for the December quarter of the current financial year and the upward revision of FY26 real GDP growth to 7.6% from 7.4% estimated under the earlier GDP series in January shows that the Indian economy is strong, aided by robust domestic consumption, cautious fiscal handling and reforms that have been building over time, according to Vivek Jalan, partner, Tax Connect Advisory Services.
The impact of GST 2.0 is clearly visible on domestic consumption, said Jalan. Net GST collections from domestic consumption, at ₹1.25 trillion, has grown 6.2% annually, even after the GST rate cuts, he said.
The continued improvement in GST receipts, despite persistent global uncertainties, underscores the inherent resilience and expanding formalisation of the economy, said Saurabh Agarwal, tax partner, EY India.
“As structural reforms continue to take hold, these trends highlight a maturing tax ecosystem and a confident domestic market, setting the stage for sustained and inclusive economic momentum,” said Agarwal.
In September 2025, the GST Council simplified the tax rate structure, cut rates sharply and streamlined tax refund procedures to stimulate consumption and to improve the ease of doing business.