MS Mani, Partner–GST at Deloitte India, said there is “no reason for worry” after the recent GST 2.0 changes. He compared the situation to the rate cuts of 2018 and 2019, when it took a few months for higher sales volumes to offset lower tax rates. He said the latest reforms are path-breaking and unprecedented.
Gross GST collections in November stood at ₹1.7 lakh crore, with net collections of around ₹1.5 lakh crore. Despite rate cuts on several items, including reductions from 28% to 18%, Mani noted that collections were “neck to neck” with the same period last year. “If the collections are still maintaining an equilibrium or stable level, they are now destined to go up significantly as collections improve,” he said.
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Mani pointed to strong activity across sectors such as automotive, real estate, FMCG, and travel as signs of underlying demand. He linked this broad-based performance to GDP growth of over 8% in the last quarter, adding, “It’s only one way it can go, and that is up.”
Echoing this view, Pratik Jain, Partner at PwC India, said the impact of GST rate cuts will take time to fully reflect in volumes. He noted that the revenue-neutral rate has fallen to below 10%, compared with pre-GST levels, yet collections have continued to grow over time.
Jain said the government had already factored in a revenue impact of about ₹48,000 crore from the rate reductions, calling it “not a very significant amount” in the context of the overall fiscal position. While he did not specify when monthly collections might return to ₹2 lakh crore, he highlighted the government’s expectation of around 9% year-on-year growth in GST this fiscal. “I think we are going in the right direction,” he said.
Both experts said higher volumes from key sectors are likely to support collections. Jain highlighted passenger vehicles, which saw around 22% volume growth last month, along with cement, garments, FMCG products, and consumer durables. He also pointed to higher disposable income, helped by GST cuts and recent income tax reductions, as a factor supporting consumption.
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Looking at the broader tax picture, combining direct and indirect taxes, Mani said he does not expect a meaningful shortfall by the end of the fiscal year, supported by economic growth. He also noted that GST collections are becoming less seasonal, making revenues more stable. Jain agreed, saying that even if GST collections fall slightly short of targets, the gap is unlikely to be large, with a pickup expected in the final quarter.
Mani added that the focus should now shift to the next phase of GST reform, saying the progress under GST 2.0 should encourage further simplification of the tax system.
For the full interview, watch the accompanying video
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