Summary of this article
GST collections rise steadily over four consecutive months
AI tools help detect and reduce ITC evasion cases
Rate cuts and options aim to support MSMEs
Gross Goods and Services Tax (GST) collections have been growing steadily in the last four months, as per the data shared by the Ministry of Finance (MoF) in Parliament. The data has pointed towards a steady increase in monthly revenues compared to the same time period last year.
Steady Growth In Collections
GST collections for November 2025 reached Rs 170,276 crore, with a 1 per cent increase year-on-year. In December 2025, GST collections increased to Rs 174,550 crore, a 6 per cent growth. January recorded Rs 193,345 crore, also up by 6 per cent, while February collections stood at Rs 183,580 crore, registering the highest increase of 8 per cent during the period.
The rise in collections is combined with an ongoing process of improving compliance in the GST regime.
AI And Data Analytics To Crackdown On GST Evasion
The government has stated that it is using advanced data analytics and artificial intelligence (AI) tools to crack down on input tax credit (ITC) evasion.
The Centre has also stated that it has identified several instances of ITC evasion through the use of AI and data analytics. The government is using AI and data analytics tools to detect any irregularities in GST filings. The government is using these tools to scrutinise any such transactions.
GST Rates Reduced To Support MSMEs
Recent measures taken by the GST Council for the rationalisation of tax rates for MSMEs are aimed at reducing their compliance costs. The tax rate for job work services such as pharmaceuticals, leather products, bricks, etc., has been reduced to 5 per cent with ITC benefits instead of 12 per cent.
Additionally, some residual jobs have been aligned with a tax rate of 18 per cent with ITC benefits for matching the tax rate for the same goods.
The tax rate for services, such as common effluent treatment plants and biomedical waste treatment facilities, has also been reduced to 5 per cent with ITC benefits from the previous 12 per cent.
The tax rate for hotel accommodation up to Rs 7,500 has been reduced to 5 per cent without ITC benefits instead of the earlier rate. Similarly, the tax rate for beauty and physical well-being services has also been reduced to 5 per cent without ITC benefits from the earlier rate of 18 per cent.
The tax rate for cinema tickets up to Rs 100 has also been reduced to 5 per cent compared to the earlier rate of 12 per cent.
In transport and logistics, including passenger transport and goods carriage, MSMEs have been given the option to choose between a concessional 5 per cent rate with restricted or no ITC, or the standard 18 per cent rate with ITC.
Automation And Awareness Efforts
The government has expanded automation for scrutiny in GST returns. A system-generated list of GST identification numbers (GSTINs) is created based on certain parameters that are then reviewed for further action by tax officers.
In order to raise awareness, various steps have been taken to reach out to the taxpayers. These steps include the updating of user manuals and frequently asked questions on the GST portal, trade event help desks, and educational videos on the official site.
The training material prepared for small taxpayers has also been put online to raise awareness about GST compliance and the overall system.
