The latest official data shows cumulative GST collections for FY26 at ₹20.27 lakh crore so far, up 8.3% from the previous year, suggesting that revenues are holding strong on a high base. While the headline numbers reflect steady growth, a closer analysis of the data reveals deeper trends — import-led revenue buoyancy, improving compliance, rising refunds, and diverging state-level performance.
Experts say these trends indicate that the GST regime is gradually maturing, with structural factors now driving collections rather than temporary spikes.
Manoj Mishra, Partner and Tax Controversy Management Leader at Grant Thornton Bharat, said the February numbers reaffirm fiscal stability as the financial year approaches its end.
“February’s gross GST collections at ₹1.83 lakh crore, marking an 8.1% year-on-year increase, reaffirm the steady fiscal momentum as we approach the close of FY26. With cumulative collections reaching ₹20.27 lakh crore, up 8.3% so far this year, the numbers indicate that GST revenues are holding firm even on a high base, reflecting structural stability rather than cyclical spikes,” he said.
According to Mishra, the composition of the growth provides important insights into the economy.
Ikesh Nagpal, Lead-Indirect Tax, AKM Global, a tax and consulting firm states, “The ongoing GST 2.0 reforms are beginning to show tangible results, with improved compliance and process efficiencies driving an 11% surge in IGST from imports. The settlement data further reinforces this optimism, as key manufacturing states like Gujarat (19%) and Maharashtra (11%) recorded double-digit growth, signalling a broadening of the tax base and sustained revenue buoyancy across industrial corridors.”
Import-led GST growth highlights changing revenue mix
One of the key takeaways from the February GST data is the divergence between domestic and import-driven tax collections.
Domestic GST revenue growth: 5.3%
GST from imports (IGST): 17.2% growth
This suggests that trade activity and customs-side compliance are currently contributing more to GST growth than domestic consumption alone.
Mishra noted that the revenue mix deserves closer attention.
“What merits closer attention is the underlying mix. Domestic revenues grew at a moderate 5.3%, while import-linked IGST rose 17.2%, indicating that trade activity and tighter customs-side compliance are currently providing a stronger lift to overall collections than core domestic demand.”
Pratik Jain, Partner at Pricewaterhouse & Co, said the data signals a transition into a more predictable GST growth cycle.
“Gross GST collections are showing a steady increase after GST 2.0, reflecting resilience in the economy backed by sustained demand. Many consumption states have had relatively higher growth than others. The data indicates that GST has entered into a phase of stable and predictable growth, which is encouraging to see,” he said.
He added that higher import growth reflects buoyancy in cross-border trade activity.
Rising refunds but strong net revenues
Another important signal from the February data is the rise in GST refunds, which increased 10.2%, even as net GST revenue remained strong.
Total refunds: ₹22,595 crore
Net GST revenue: ₹1.61 lakh crore
Net revenue growth: 7.9%
This trend suggests that the GST system is becoming more efficient in processing refunds without weakening revenue collections.
Mishra said this reflects a maturing tax administration.
“Equally important is the 10.2% rise in refunds, with net revenues still posting a healthy 7.9% increase. This indicates a maturing GST architecture that is balancing revenue strength with timely liquidity flows to businesses.”
Sivakumar Ramjee, Executive Director – Indirect Tax at Nangia Global, said the data shows compliance improvements are now playing a bigger role in revenue growth.
“Despite GST 2.0 rate rationalisation trimming a few slabs, gross collections still flexed an 8.1% year-on-year growth, with net revenues up 7.9%. In simple terms, even after lowering some rates, the tax kitty didn’t go on a diet. That tells us compliance and base expansion are doing the heavy lifting.”
He also highlighted operational improvements in the GST ecosystem.
“The real overachiever this month is import GST, jumping 17.2%. Meanwhile, export refunds through ICEGATE surged 26.5%, which means exporters are getting their money back faster.”
Industrial states continue to dominate GST collections
State-wise data shows that Maharashtra remains the largest contributor to GST revenues, followed by Karnataka and Gujarat, underlining the role of major industrial and services hubs in driving tax collections.
Mishra said this trend underscores the resilience of key economic centres.
“The continued dominance of Maharashtra, followed by Karnataka and Gujarat, underscores the resilience of key industrial and services hubs.”
However, experts say the data also points to a broadening of economic activity across smaller and emerging states.
Saurabh Agarwal, Tax Partner at EY India, said several smaller states recorded strong growth in GST collections.
“The strong uptick in states such as Jammu & Kashmir, Bihar, Sikkim, Nagaland, Manipur, Meghalaya, Odisha and Ladakh reflects the deepening of economic activity across the breadth of the country, signalling that growth is becoming more broad-based than ever.”
According to him, this indicates strengthening consumption trends and economic expansion beyond traditional growth centres.
“This performance reaffirms the strength of India’s consumption engine, which remains a critical pillar of the nation’s growth trajectory.”
Diverging state trends raise concerns
Despite the overall growth in GST collections, the data also reveals uneven performance across states, which could become a policy concern.
MS Mani, Partner at Deloitte India, pointed out that some large states recorded weaker growth compared to the national average.
“The negative growth reported by major states such as Tamil Nadu, Madhya Pradesh and Rajasthan, and the single-digit growth below the national average reported by West Bengal, Haryana, Uttar Pradesh and Maharashtra would be a matter of concern for states and policymakers,” he said.
Mani added that consumption growth has helped offset the impact of GST rate rationalisation.
“These GST collection figures reflect the fact that there has been a consumption uptick that has more than compensated for the rate reductions leading to an 8% increase in monthly collections.”
However, he noted that GST revenues reaching the ₹2 trillion monthly mark may take longer due to the recent rate cuts.
Compensation cess decline marks structural shift in GST
Another notable development in the February data is the sharp fall in compensation cess collections, following the end of the cess regime earlier this year.
Mahesh Jaising, Partner at Deloitte India, said this marks an important shift in the GST framework.
“With the compensation cess having ended on January 31, 2026, the sharp moderation in cess collections is expected and marks a structural shift in the GST framework.”
He added that the stability in GST collections is particularly noteworthy amid global economic uncertainties.
“Domestic GST revenues continue to show resilience, while higher import-led IGST collections point to sustained trade activity.
Overall, the data points to a broad-based but calibrated recovery.”
Compliance, technology and formalisation driving GST growth
Experts say the February GST data highlights how technology-driven compliance measures and business formalisation are strengthening India’s tax base.
Abhishek Jain, Partner and Indirect Tax Head at KPMG, said the data signals improved enforcement and compliance.
“An 8.1% rise in monthly GST collections post GST 2.0 rate rationalisation signals steady economic momentum and improved compliance. The growth reflects a combination of resilient consumption supported by GST rate rationalisation, formalisation of businesses, and better enforcement through technology-driven monitoring.”
GST entering a stable growth phase
Taken together, the February GST numbers suggest that India’s indirect tax system is moving into a more mature phase, where growth is supported by compliance improvements, formalisation, and expanding economic activity rather than temporary factors.
Ramjee summed up the transition in a lighter but telling observation.
“The February 2026 GST numbers read less like a tax report and more like a fitness tracker for the Indian economy. GST is no longer in survival mode. It’s entering a mature, steady-growth phase and quietly proving that compliance can sometimes be more powerful than higher rates.”
With FY26 nearing its close, the data indicates that India’s GST regime is stabilising, even as the economy navigates global uncertainties — a signal that the tax system is gradually delivering on its promise of sustained, broad-based revenue growth.
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