India's Goods and Services Tax (GST) revenue has the potential to more than double, reaching an average of Rs 4 lakh crore to Rs 5 lakh crore every month, if systemic loopholes are effectively addressed, according to a top State Bank of India (SBI) economist. This ambitious projection highlights a significant upside for the government's tax coffers, currently averaging under the Rs 2 lakh crore mark.
The Road to Higher GST Revenue
Soumya Kanti Ghosh, the Group Chief Economic Advisor at SBI, made these revelations during his address at the Delhi School of Economics' Public Policy Conference on Thursday, November 20, 2025. Ghosh stated that his discussions with government officials indicate a consensus on this substantial untapped potential within the indirect tax framework.
He underscored the remarkable journey of GST collections, which have seen a dramatic upswing over the past five years. The average monthly gross GST collection has surged from less than Rs 1 lakh crore to consistently exceeding Rs 2 lakh crore. Ghosh specifically cited the budgeted GST collection for the fiscal year 2026 (FY26), which stands at approximately Rs 25 trillion, a massive leap from the Rs 11 lakh crore recorded in FY21.
Current Fiscal Performance and Festive Boost
The current financial year provides a solid foundation for this optimistic outlook. Official data reveals that gross GST collections for the first seven months of FY26 have totaled Rs 13.89 lakh crore, reflecting a 9% increase compared to the same period in the previous fiscal year. This translates to a monthly average of Rs 1.98 lakh crore for this period.
The fiscal year has already witnessed two months where collections breached the significant Rs 2 lakh crore threshold. A record-breaking Rs 2.37 lakh crore was collected in April 2025, followed by Rs 2.01 lakh crore in May. More recently, October 2025 saw collections of Rs 1.96 lakh crore, marking a 4.6% year-on-year growth, even after significant GST rate reductions that took effect from September 22.
Looking ahead, Ghosh's own SBI Research analysis predicts a return to form for November. GST collections in November 2025 are anticipated to cross the Rs 2 lakh crore mark again, fueled by festive season demand, improved compliance, and the impact of the lower tax rates. The official data for November will be published on December 1.
Broader Economic Implications
Ghosh emphasized that the current average of around Rs 2 lakh crore per month is an "underestimate" of the system's true capacity. He stressed that a collaborative effort between the Centre and states to plug revenue leakages is crucial to unlocking this higher potential.
This potential windfall has profound implications for the broader tax structure. A more robust indirect tax system could enable the government to subsidize or provide relief on direct taxes, as Ghosh pointed out, "better the indirect tax structure, the better it will be able to subsidise direct taxes."
This vision aligns with the government's fiscal expectations outlined in the Union Budget for FY26, which projects the Centre's gross tax revenue to reach Rs 42.7 lakh crore, an 11.3% year-on-year increase for Central GST collections alone, which are budgeted at Rs 10.11 lakh crore.
