GST Revenues To Surpass FY26 Targets Even After Slab Restructuring, Maharashtra And Karnataka To Be Big Gainers: SBI Research

SBI Research projects that India’s Goods and Services Tax (GST) collections will exceed budget estimates in FY26, even after a major restructuring of tax slabs, reported The Times Of India.

The report stated, "We project GST revenue for FY26 will still be higher than budgeted GST collections,"aligning its assessment with the growth rate assumptions shared by the GST Council.

The optimism follows the Council’s recent overhaul of the GST framework in September 2025, which introduced a simplified four-tier structure—0 per cent for exempt items, 5 per cent and 18 per cent as standard rates, and 40 per cent on luxury and sin goods.

SBI Research expects most states to gain from this rationalisation, with Maharashtra likely to post a 6 per cent revenue increase and Karnataka projected to grow by 10.7 per cent.

"Thus, overall states will remain net gainers post GST rationalisation," the report added.

Historical data supports this outlook. Earlier rate revisions in July 2018 and October 2019 showed that revenues usually stabilise and rise after a short transition phase.

SBI noted that while collections may temporarily dip for three to four months—reducing revenue by about Rs 5,000 crore monthly or nearly Rs 60,000 crore annually—they typically rebound with steady monthly increases of 5–6 per cent. "In past episodes, this dynamic has translated into additional revenues of nearly Rs 1 trillion," the analysis observed.

Recent figures highlight this resilience. GST collections for October 2025 climbed 4.6 per cent year-on-year to Rs 1.95 lakh crore, while receipts from April to October FY26 reached Rs 15.89 lakh crore—up 9 per cent from Rs 12.74 lakh crore in the same period last year, confirming sustained momentum in tax inflows.

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