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India's GST collections rise 8.1% YoY to Rs 1.83 lakh crore in February

March 01, 2026 5 min read Economics Polity & Governance GS3 (Indian Economy Taxation) GS2 (Fiscal Federalism Centre-State Relations)
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What Happened

  • Gross GST revenue for February 2026 stood at ₹1,83,609 crore — an 8.1% year-on-year increase over February 2025.
  • The cumulative GST collection for FY2025-26 (April 2025 to February 2026) crossed ₹20.27 lakh crore, tracking well above the full-year budget target.
  • Growth was driven by import-linked revenues (up 17.2% YoY to ₹47,837 crore) while domestic transaction revenues grew more moderately (up 5.3% to ₹1,35,772 crore).
  • The strong import revenue growth reflects increased trade activity, particularly in capital goods, electronics, and crude oil-linked transactions.
  • Net GST revenue (after refunds of ₹22,595 crore) stood at ₹1,61,014 crore — a 7.9% YoY increase.

Static Topic Bridges

GST and Fiscal Federalism — How Revenue is Shared Between Centre and States

GST is a destination-based, dual-levy tax — both the Centre and states levy tax on the same transaction simultaneously. CGST (Central GST) goes entirely to the Centre; SGST (State GST) goes entirely to the state where the transaction occurs; IGST (Integrated GST) on inter-state transactions is collected by the Centre and then apportioned between the originating Centre share and the destination state's share. The IGST mechanism is the core of GST's fiscal federalism architecture — it ensures states receive revenue based on consumption (destination) rather than production, correcting the pre-GST distortion where manufacturing states captured most indirect tax revenue.

  • CGST: Levied and retained by the Central Government.
  • SGST: Levied and retained by the concerned State Government.
  • IGST: Levied by the Centre on inter-state supplies + imports; apportioned — Centre retains half, destination state gets the other half (50:50 at first instance, then further 42% of Centre's share devolved to states per Finance Commission formula).
  • Union Territories without legislature (Andaman & Nicobar, Chandigarh, etc.) pay UTGST (Union Territory GST) instead of SGST.
  • CAG findings: In 2018-19, ₹13,944 crore of IGST was left unapportioned; by 2021-22, ~₹2.4 lakh crore remained undistributed — a significant Centre-state friction point.
  • GST Compensation Cess (2017-2022): States guaranteed 14% annual revenue growth for 5 years; Centre collected compensation cess on luxury/demerit goods to fund shortfalls. Cess ended June 2022; FY26 is first year without any compensation backstop.

Connection to this news: February 2026's ₹1.83 lakh crore figure is not just a Centre revenue story — states collectively receive SGST plus their IGST share, making monthly GST data a proxy for state fiscal health and their capacity to fund welfare schemes.

GST Council — Constitutional Architecture and Decision-Making

The GST Council is a constitutional body established under Article 279A of the Constitution (inserted by the 101st Constitutional Amendment Act, 2016). It is a joint forum of the Centre and states, chaired by the Union Finance Minister with state Finance Ministers as members. The Council makes recommendations on GST rates, exemptions, threshold limits, dispute resolution, and administrative issues. Decisions require a three-fourths majority — Centre's vote has one-third weight and all states combined have two-thirds weight, ensuring no side can unilaterally override the other. The Council has met over 55 times since GST's launch in July 2017.

  • Constitutional basis: Article 279A (inserted by 101st Constitutional Amendment Act, 2016).
  • Chairman: Union Finance Minister.
  • Members: State Finance Ministers (or equivalent) + Union Minister of State for Finance.
  • Voting: 3/4th majority required; Centre's vote = 1/3rd of total votes cast; states' votes collectively = 2/3rd.
  • Key Council decisions: July 2017 GST launch; September 2025 rate rationalisation (two-slab structure); various COVID-related relief measures.
  • SC ruling (2022, Union of India vs. Mohit Minerals): Clarified that GST Council's recommendations are not binding on Parliament or state legislatures — they are merely persuasive; taxing power vests in Parliament/state legislatures.

Connection to this news: Every monthly GST figure is a product of the Council's collective decisions on rate structures — the September 2025 rate rationalisation (which simplified the 4-slab to 2-slab system) is directly influencing the revenue trajectory seen in February 2026 data.

101st Constitutional Amendment Act, 2016 — GST's Constitutional Foundation

The 101st Constitutional Amendment Act, 2016 is one of the most transformative constitutional changes in independent India, fundamentally restructuring the indirect taxation powers of the Centre and states. Before GST, the Constitution assigned excise duty to Centre (Article 246, List I) and sales tax to states (Article 246, List II), creating a fragmented multi-tax system. The amendment: (a) inserted Article 246A giving both Parliament and state legislatures concurrent power to legislate on GST; (b) inserted Article 269A for IGST on inter-state trade; (c) inserted Article 279A creating the GST Council; (d) amended the Seventh Schedule to delete tax entries subsumed into GST.

  • Article 246A: Both Centre and states have simultaneous (concurrent) power to levy GST — a unique constitutional design.
  • Article 269A: IGST on inter-state supply levied by Centre and apportioned between Centre and states.
  • Goods and services excluded from GST: Crude oil, petrol, diesel, ATF, natural gas (under GST framework but zero-rated — to be included when GST Council decides), alcohol for human consumption (excluded permanently), electricity.
  • Constitutional Amendment required: 2/3rd majority in Parliament + ratification by at least half of state legislatures.
  • The amendment was passed by Rajya Sabha in August 2016 (after being introduced in 2014 — one of the longest debated constitutional amendments).

Connection to this news: The robust February 2026 GST collections validate the constitutional design — the dual-levy, destination-based framework has created a buoyant revenue stream that benefits both Centre and states, though friction over IGST apportionment timing remains a live federalism issue.

Key Facts & Data

  • February 2026 gross GST: ₹1,83,609 crore (8.1% YoY growth).
  • February 2026 net GST (after refunds): ₹1,61,014 crore (7.9% YoY growth).
  • Domestic revenue: ₹1,35,772 crore (5.3% growth); Import revenue: ₹47,837 crore (17.2% growth).
  • Total refunds February 2026: ₹22,595 crore (10.2% growth).
  • FY2025-26 cumulative (April-February): ₹20.27 lakh crore.
  • Constitutional basis of GST Council: Article 279A (101st Constitutional Amendment Act, 2016).
  • Voting in GST Council: 3/4 majority; Centre = 1/3 weight; all states = 2/3 weight.
  • CGST retained by Centre; SGST by respective state; IGST apportioned 50:50 Centre-states.
  • GST compensation cess ended: June 2022 (5-year guarantee period).
  • SC ruling (2022): GST Council recommendations are persuasive, not binding.
  • Goods outside GST: Petroleum products (crude, petrol, diesel, ATF, natural gas), alcohol for human consumption, electricity.