India’s Goods and Services Tax (GST) collections continue to show robust growth, with gross GST revenues rising 16.4% year-on-year to over ₹2.01 lakh crore in May 2025, according to government data released on Sunday. This strong performance follows a record-breaking April 2025, when GST collections hit an all-time high of ₹2.37 lakh crore.
Breakdown of May 2025 GST Collections
The May 2025 GST figures reflect significant contributions from both domestic and import sources:
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Domestic Transactions: Gross revenues from domestic transactions increased by 13.7% to approximately ₹1.50 lakh crore.
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Imports: GST revenue from imports saw a sharper rise of 25.2%, reaching ₹51,266 crore.
The total GST collection for May 2025 was distributed as follows:
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Central GST: ₹35,434 crore
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State GST: ₹43,902 crore
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Integrated GST: ₹1.09 lakh crore
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Cess: ₹12,879 crore
In comparison, May 2024 recorded a gross GST collection of ₹1.72 lakh crore, highlighting the significant growth in the current fiscal year.
Net GST Collections and Refunds
After accounting for refunds, which dropped by 4% to ₹27,210 crore in May 2025, the net GST mop-up stood at approximately ₹1.74 lakh crore. This reflects an impressive 20.4% year-on-year growth, underscoring the strength of India’s tax collection framework.
State-Wise Variations in GST Growth
While the national GST growth rate is strong, there are notable variations across states. According to M S Mani, Partner at Deloitte India, the disparity in growth rates among states warrants a deeper sectoral analysis. Key observations include:
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High Growth States: Large states like Maharashtra, West Bengal, Karnataka, and Tamil Nadu reported GST collection increases ranging from 17% to 25%.
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Moderate Growth States: States such as Gujarat, Andhra Pradesh, and Telangana saw more modest increases of up to 6%.
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Median Growth States: Madhya Pradesh, Haryana, Punjab, and Rajasthan recorded growth rates of around 10%.
Mani noted that the uneven growth across states could be attributed to sectoral or seasonal factors, emphasizing the need for a detailed, data-driven analysis to understand these trends.
Implications for India’s Economy
The consistent rise in GST collections signals robust economic activity and improved tax compliance. The significant growth in import-related GST revenues suggests strong international trade, while the increase in domestic collections reflects healthy consumer spending and business activity. The decline in refunds further bolsters the net revenue, providing the government with greater fiscal flexibility to fund development initiatives.
Conclusion
The 16.4% surge in GST collections to over ₹2.01 lakh crore in May 2025 reflects India’s resilient economic momentum and the effectiveness of its tax regime. With net collections growing by 20.4% and refunds declining, the government is well-positioned to support infrastructure and social welfare programs. However, the varying growth rates across states highlight the need for targeted policies to address regional disparities. As India continues to refine its GST framework, sustained revenue growth will be crucial for driving inclusive and balanced economic progress in 2025 and beyond.
