The strong momentum of goods and services tax (GST) collections in October belies not only the near-absurd fears of massive revenue losses post-rate rationalisation, but it also refutes the apprehension expressed by states about a perceived decline in GST revenue post-rationalisation, SBI Research said in a report.
While short-term annual GST losses from rate rationalisation varied from Rs 48,000 crore (Finance Ministry) to Rs 10 lakh crore (Surjit Bhalla & Rajesh Shukla), October 2025 GST collections (September transaction) rose 4.6% YoY to Rs 1.96 lakh crore.
Domestic revenue grew 2%, while import revenue increased 12.8%.
Refunds for October reached Rs 26,934 crore (+39.6% on year), pushing net collections to Rs 1.69 lakh crore, up 0.6% on year. State-level apprehensions proved unfounded, SBI Research said in a report titled ‘The Loss That Never Was!’
Karnataka, expecting a Rs 7,083 crore monthly drop, gained 10%; Telangana and Punjab rose around 10% and 4%, respectively.
West Bengal and Kerala saw minor dips of 1% and 2%.
“Assuming that states experience same gains (and losses) post rationalisation as in October 25, we project GST revenue for FY26 wherein on a very rudimentary basis, most of the states seem to experience positive gains for the entire fiscal post rationalisation confirming overall states should remain Net Gainers post GST rationalisation,” it said.
FY26 projections, based on October trends, show most states as net gainers: Maharashtra (+6%), Karnataka (+10.7%), Gujarat (+5.9%), with only a few like Jharkhand (-5.2%) and Uttarakhand (-4.6%) will see a decline.
Historical evidence from 2018 and 2019 rate cuts reinforces this pattern: initial 3–4% monthly dips ( Rs 5,000 crore) were followed by 5–6% sustained growth, yielding nearly Rs 1 lakh crore in additional revenue annually, it said.