Gross Goods and Services Tax (GST) collections recorded a moderate growth of 6.1 per cent year-on-year to cross Rs 1.74 lakh crore in December 2025, according to official data released on Thursday, reflecting subdued domestic demand following major tax rate cuts.

In December 2024, gross GST revenue stood at over Rs 1.64 lakh crore. The latest figures indicate a clear divergence between domestic and import-related collections. Revenue from domestic transactions increased marginally by 1.2 per cent to more than Rs 1.22 lakh crore during December 2025, pointing to slower growth in internal consumption.

In contrast, GST revenues from imported goods surged sharply by 19.7 per cent to Rs 51,977 crore, providing significant support to the overall collections for the month.

Refunds issued during December rose substantially by 31 per cent to Rs 28,980 crore, compared to the same period last year. After accounting for refunds, net GST revenues stood at over Rs 1.45 lakh crore, registering a modest year-on-year growth of 2.2 per cent.

Cess collections witnessed a steep decline, falling to Rs 4,238 crore in December 2025 from Rs 12,003 crore in December 2024. The sharp drop is largely attributed to changes in the structure of the compensation cess.

From September 22, 2025, the government slashed GST rates on around 375 items as part of a sweeping rationalisation exercise aimed at making goods cheaper for consumers. Additionally, the compensation cess is now levied only on tobacco and related products, instead of a wider range of luxury, sin and demerit goods earlier.

These tax reforms, while easing the burden on consumers, have had a visible impact on revenue growth, particularly from domestic sales, officials said.