Key Highlights
- Next phase: Process reforms to simplify GST compliance will be taken up by the GST Council on October 7.
- Phase one recap: Rate changes under the "Next-Gen GST" reforms came into effect on September 22, 2025.
- Collections up: Gross GST collections rose 11.6% to ₹12.46 lakh crore in April–September 2026.
- Consumption boost: Reported consumer (B2C) sales grew 26.7% in the post-reform period.
- Refunds: Around ₹1.80 lakh crore was refunded during April–September.
The first phase of India's "Next-Gen GST" reforms changed what people pay. The second phase aims to change how businesses comply. Finance Minister Nirmala Sitharaman said on Monday that process-related reforms will soon come before the GST Council, with proposals to be considered on October 7.
Writing on LinkedIn, she said the reforms are designed to give households relief, offer businesses greater certainty, and make it easier for taxpayers to meet their obligations. The proposals have been developed in consultation with states and aim to cut the time and cost of compliance.
The Numbers Since the Rate Cuts
| Indicator | Figure |
|---|---|
| Gross GST collections (Apr–Sep 2026) | ₹12.46 lakh crore, up 11.6% |
| Net GST collections (H1) | Up 10.4% |
| Collections growth, June–September | Nearly 15% |
| Taxable supplies (Oct 2025–Jul 2026) | Up 25.8% |
| Consumer (B2C) supplies | Up 26.7% |
| GST registrations (end-August) | ~1.71 crore, up ~15% |
| Refunds (Apr–Sep) | ~₹1.80 lakh crore |
| States' SGST receipts (Apr–Sep) | Up ~16% |
Why It Matters: Lower Rates, Higher Collections
The data points to an interesting outcome. The rate changes of September 2025 lowered taxes on many goods, yet collections have kept growing at double digits since June. The strong rise in consumer sales suggests that lower rates boosted spending enough to lift overall revenue.
The 16% rise in states' SGST receipts is also important, as states had worried that rate cuts would hurt their revenues.
The next phase targets a different pain point. For small businesses, especially in Tier-2 and Tier-3 cities, the biggest GST burden is often not the tax itself but the time and cost of filing returns, claiming credits and waiting for refunds. Sitharaman specifically highlighted predictable refunds as important for businesses. With about ₹1.80 lakh crore refunded in six months, faster and more predictable refunds can free up significant working capital.
A Big Wednesday
October 7 is shaping up to be a key day for the economy. Alongside the GST Council meeting, the Reserve Bank of India is widely expected to announce a 25 basis point rate hike in its policy decision the same day. Businesses will be watching both outcomes closely: one could ease compliance costs, the other could raise borrowing costs.
The Bottom Line
GST's first phase cut rates; its second aims to cut paperwork. If the Council clears simpler processes on October 7, small businesses could feel the benefit not in what they pay, but in how much time and money they spend paying it.
With inputs from IANS.