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Gross GST collections rose by 6.1 per cent to over INR 1.74 lakh crore last month, even as domestic revenue growth slowed following significant tax rate cuts. While domestic transactions saw limited growth, collections from imports increased sharply, helping support overall revenues. Net GST collections grew modestly after higher refunds, and cess collections declined due to structural changes. Experts noted that higher business volumes are offsetting lower tax rates, though several large and mid-sized states reported weak or negative growth in GST collections.
India's gross Goods and Services Tax collections recorded a steady rise last month, increasing by 6.1 per cent year-on-year to more than INR 1.74 lakh crore, according to official government data. The growth came despite a visible slowdown in revenue from domestic transactions following major tax rate reductions implemented earlier in the financial year. Advertisement
In the same period last year, gross GST collections stood at over INR 1.64 lakh crore. Collections in the preceding month were reported at INR 1.70 lakh crore, which had already reflected the full impact of the revised GST structure.
Revenue from domestic transactions grew modestly by 1.2 per cent to over INR 1.22 lakh crore, indicating pressure on internal consumption-led collections. In contrast, GST revenue from imported goods rose sharply by 19.7 per cent to INR 51,977 crore, providing significant support to overall tax inflows. Total gross GST revenue for the month was reported at INR 1,74,550 crore.
Refunds issued during the month increased by 31 per cent to INR 28,980 crore. After adjusting for refunds, net GST revenue stood at over INR 1.45 lakh crore, marking a year-on-year increase of 2.2 per cent.
Cess collections declined sharply to INR 4,238 crore compared to INR 12,003 crore in the corresponding period of the previous year. The drop aligns with changes in the cess framework following the government's GST rationalisation exercise.
As part of the restructuring, GST rates on around 375 items were reduced, with the tax structure consolidated into two primary slabs of 5 per cent and 18 per cent, replacing the earlier four-rate system. A separate 40 per cent rate was introduced for ultra-luxury and demerit goods. Compensation cess is now levied only on tobacco and related products, instead of a broader range of luxury and sin goods earlier.
Tax experts noted that while GST collections showed strong momentum in the first half of the current financial year, the pace has moderated after the sharp rate reductions. Deloitte India Partner MS Mani observed that the 6.1 per cent growth in gross collections suggests higher business volumes are partially offsetting the impact of lower tax rates.
However, Mani also flagged concerns at the state level, stating that seventeen states, including Delhi, Bihar, Madhya Pradesh, Telangana and Tamil Nadu, recorded negative growth in GST collections. Several large states such as Maharashtra, Karnataka, Andhra Pradesh and Haryana reported only low single-digit growth, while very few states maintained the stronger growth trends seen earlier in the fiscal year.
Grant Thornton Bharat Partner and Tax Controversy Management Leader Manoj Mishra said that sustained contributions from Maharashtra, Gujarat, Karnataka and Haryana continue to play a key role in supporting overall GST revenues, despite uneven performance across states.
Source PTI
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