Net goods and services tax (GST) showed signs of recovery from January 2026, after remaining subdued through the end of 2025, following the government’s rationalisation of GST rates in September. The September rate rationalisation simplified the structure to two main slabs of 5 per cent and 18 per cent, with a special 40 per cent rate for select goods. The rate rejig exercise also withdrew compensation cess on most products, while retaining it on tobacco products until the outstanding compensation-cess loan and interest liabilities were discharged. Those remaining liabilities were treated as discharged with effect from February 1. Vivek Jalan, partner, Tax Connect Advisory Services, said the resilience of collections demonstrates the impact of GST 2.0 despite the reduction in rates and slabs. “Even after a drastic reduction in GST rates and slabs, net GST collections have remained resilient,” Jalan said.