GST Council is scheduled to meet next week after a one-year hiatus. One assumes the reform process initiated through GST 2.0 at its last meeting in September 2025 should be taken further. Rate compression and rationalisation — by which the number of GST rates were reduced to 5% and 18% slabs, and for almost all items of common consumption dropped to 5% — rejuvenated aggregate economic demand. This has been endorsed in two separate KPMG and Deloitte surveys earlier this year.
GoI’s assessment that the growth in demand would more than compensate for immediate fall in revenues seems to have played out. After an initial slump in growth rates of monthly GST collections in Q3 FY26 (except for May 2026), growth rates have been above 7.5%, touching 15.8% in July. Net revenue collections (cumulative Centre and states) from GST grew at 9.2% during April-July 2026 compared to the same period of FY26.
