Net GST Collections Rise 20.4% to Rs 1.7 Trillion: Govt Data

Introduction

In May 2025, India’s Goods and Services Tax (GST) collections witnessed a significant year-on-year (YoY) increase of 16.4%, reaching ₹2.01 lakh crore. This robust growth was primarily driven by a substantial rise in GST revenue from imports, which surged by 25.2% to ₹51,266 crore. After accounting for refunds, the net GST revenue stood at ₹1.73 lakh crore, marking a 20.4% increase compared to the same period in the previous year .

Factors Contributing to the Growth

1. Increase in Import-Related GST Revenue The substantial growth in GST revenue from imports indicates a robust demand for imported goods, reflecting strong economic activity and consumer sentiment. This uptick is also indicative of improved compliance and enforcement measures within the GST framework.
2. Decline in Refund Outgo A 4% decrease in refund outgo contributed to the higher net GST revenue, suggesting enhanced efficiency in the processing and settlement of refunds.
3. Domestic GST Revenue Growth Domestic GST revenue also saw a healthy increase of 13.7%, reaching approximately ₹1.50 lakh crore. This growth underscores the resilience of domestic consumption and the effectiveness of the GST system in capturing economic transactions.

Sectoral and Regional Insights

• Sectoral Performance The increase in import-related GST revenue points to a surge in sectors reliant on imported goods, such as electronics, machinery, and chemicals. This trend may reflect both increased demand and potential shifts in global supply chains.
• Regional Variations GST collections varied across states, with Maharashtra, Tamil Nadu, Karnataka, and Delhi reporting significant growth rates, while states like Gujarat experienced more modest increases. These disparities highlight the diverse economic activities and compliance levels across regions .

Implications for Fiscal Policy and Economic Outlook

The strong growth in GST collections, particularly from imports, provides the government with increased fiscal space to invest in infrastructure, social welfare, and other developmental initiatives. However, the rise in import-related revenue also necessitates a balanced approach to trade policies to ensure domestic industries remain competitive.

Conclusion

The 20.4% growth in net GST revenue in May 2025 underscores the effectiveness of the GST system in capturing economic activity and the resilience of both domestic and international trade sectors. Continued monitoring and adaptive policy measures will be essential to sustain this positive trend and address emerging economic challenges.