India, Nov. 2 -- When the GST Council announced a rate rationalisation of the indirect tax regime - it was effectively a reduction in the tax burden on most things - it also embraced an opposing dialectic vis-a-vis revenue collections. On the one hand were the headwinds which would bring down GST collections for the similar amount of spends on goods and services, and on the other, was an expectation that consumers would respond to lower tax rates, in effect lower prices, and buy more, leading to a higher tax collection despite lower tax rates. The government put its faith in the latter.

The monthly GST data for October - it primarily reflects tax collections for business activity in the month of September - vindicates the government's be...