HOME > MARKETS > ECONOMY NEWS
  ECONOMY NEWS
ECONOMY
GST revenue in current financial year to exceed budget estimates: SBI Research
Nov-03-2025

SBI Research in its latest report has said that the Goods and Services (GST) revenue for the Financial Year 2026 (FY26) will still be higher than budgeted collections. The report projects that even after accounting for similar gains and losses across states following tax rationalisation measures, GST receipts in FY26 are likely to surpass the government's budget estimates.

It noted the projections are based on the growth rate assumptions released by the GST Council. The GST rate rationalisation, which was introduced in September 2025 provides two-tier structure of 5 per cent and 18 per cent, along with a 0 per cent slab (exempt) and a new 40 per cent demerit rate for luxury and sin goods.

The report noted that Maharashtra is projected to gain by 6 per cent, while Karnataka will gain by 10.7 per cent. It added ‘Thus, overall states will remain net gainers post GST rationalisation.’ Evidence from earlier rounds of GST rate changes, such as those in July 2018 and October 2019, suggests that rationalisation does not necessarily weaken revenue collections. Instead, the evidence points to a temporary adjustment phase followed by stronger inflows.

The report added that while an immediate reduction in rates can cause a short-term dip of around 3-4 per cent month-on-month (roughly Rs 5,000 crore, or an annualized Rs 60,000 crore), revenues typically rebound with sustained growth of 5-6 per cent per month.

  RELATED NEWS >>