The Indian government releases GST (Goods and Services Tax) collection figures on the first day of every month. February 2026’s collection of ₹1.83 lakh crore is significant as it reflects the economic activity of the 11th month of the 2025-26 financial year.

In September 2025, the Indian government implemented a major reform called ‘GST 2.0’. It simplified the complex multiple tax slabs (5%, 12%, 18%, and 28%) into a primary two-tiered model of 5% (essentials) and 18% (others), aiming to reduce the tax burden and boost spending.

Economists divide products into ‘Durables’ (items like cars and fridges that last many years) and ‘Non-Durables’ (items like milk or paper that are used once or for a short time). Tax cuts on non-durables often lead to immediate spending increases because people buy these items every day.

IGST (Integrated Goods and Services Tax) is one of the three components of GST. While CGST and SGST are for domestic trade, IGST is applied to interstate trade and imports. When India imports goods, the government collects IGST based on the value of the goods plus customs duty.

In the GST system, states with higher industrial activity or higher consumption tend to collect more tax. ‘Disparity’ refers to the concern that while some states (like Maharashtra) show high growth, others may be lagging, creating an uneven economic landscape across the country.

In India, the budget and tax records are managed according to the Financial Year (FY), which starts on April 1 and ends on March 31. For example, FY26 refers to the period from April 2025 to March 2026.

When a currency ‘weakens,’ it loses value compared to other major currencies (usually the US Dollar). This makes imports more expensive because Indian companies have to pay more rupees for the same amount of foreign goods.

Most international trade, especially for commodities like oil and gold, is conducted in US Dollars. This means if the Indian Rupee falls against the Dollar, India automatically has to pay more for its imports, even if the actual price of the good has not changed.

India is one of the world’s largest importers of crude oil and is currently working to build its own semiconductor industry to reduce its 90% dependency on foreign chips, which are essential for everything from smartphones to electric vehicles.

After the Russia-Ukraine war began in 2022, India started buying large amounts of discounted oil from Russia to save money. If India now switches back to buying oil from traditional sources like the U.S. or West Asia (Middle East) which are more expensive, its total spending on oil will naturally rise.

The Integrated GST (IGST) on imports is not calculated on the basic price alone. It is calculated on the ‘Assessable Value’, which includes the price of the item plus the cost of insurance and transportation (CIF). When the Rupee is weak, this value in Rupees automatically goes up, leading to higher tax collections.

When the cost of raw materials (inputs) like steel, copper, or chips increases, manufacturers usually pass these costs on to the customers by raising the prices of final products. This is known as ‘Cost-Push Inflation,’ which affects the buying power of common people.

Tamil Nadu, Maharashtra, and West Bengal are significant industrial and consumption centers. If these states show lower growth (like -6% for TN) compared to the national average of 8%, it suggests that the overall increase in GST is not coming from domestic production in these key states but from somewhere else, such as imports.

Tax buoyancy is an indicator of the efficiency of the tax system. A buoyancy of more than 1 means that tax revenue is growing faster than the country’s GDP. The editorial is pointing out that this ‘buoyancy’ is currently coming ‘disproportionately’ (unevenly) from imports rather than healthy domestic trade.

The editorial concludes with a warning: while the 2025 tax cuts initially made things cheaper, the rising cost of importing raw materials (due to a weak rupee) might force companies to raise prices again. This would mean the ‘relief’ given by the government through tax cuts would be lost.