India’s gross Goods and Services Tax (GST) collection went up by 6.2 per cent on-year for the month of June to Rs 1.84 lakh crore, government data showed on Tuesday. The growth indicated a steady economic momentum.
However, on a month-on-month basis, GST collection during the month in preview dipped as April 2025 recorded GST worth Rs 2.37 lakh crore, followed by Rs 2.01 lakh crore in May.
Reacting on the same, Saurabh Agarwal, Tax Partner, EY India, said, “The domestic GST collections for June 2025 present a nuanced picture. While the overall growth appears muted, likely influenced by the prevailing geopolitical uncertainties and their discernible impact on consumer sentiment, we must look beyond the headline numbers.”
He further highlighted the strong pockets of growth in regions like Nagaland, Sikkim, Tripura, Lakshadweep, and Ladakh. “This uplift suggests increased consumer activity and importantly, a continued thrust on infrastructure spending by the government in these areas, which is a positive indicator for regional development,” Saurabh Agarwal said.
Pratik Jain, Partner, Price Waterhouse & Co LLP, said, “Around 6 per cent growth in GST collections, coupled with less than 4 per cent growth in advance tax collection for first quarter of FY26 does indicate softening of demand and cautious outlook. One of the reasons could be conservative spending by the consumers which may improve in the next couple of months with the overall geopolitical situation improving.”
Refund trends
After factoring in the funds issued, the net GST collection in June was up 3.3 per cent on a year-on-year basis at Rs 1.59 lakh crore. The net mop-up was also higher as compared to the preceding month which recorded a collection of Rs 1.53 lakh crore. Notably, refunds for June came in at Rs 25,491 crore, 28.4 per cent higher year-on-year.
Import vs domestic
According to the data released by the government, revenues from domestic transactions went up by 4.6 per cent year-on-year to Rs 1.38 lakh crore, while GST collected on imports rose 11.4 per cent to Rs 45,690 crore.
The June gross GST breakdown is as follows: Central GST at Rs 34,558 crore, State GST at Rs 43,268 crore, Integrated GST at Rs 93,280 crore, and Compensation Cess at Rs 13,491 crore.
Outlook
Saurabh Agarwal said, “Looking ahead, we anticipate a period of calibrated growth in collections in the short run. The interplay of geopolitical factors affecting consumer spending, coupled with the seasonal impact of the monsoons, will likely contribute to this trend. Nevertheless, the underlying structural strengths of the Indian economy, coupled with strategic policy interventions, will be key to navigating these transient challenges and unlocking our full growth potential.”
Meanwhile, Karthik Mani, Partner, Indirect Tax, BDO India, said that such a reduction in GST collection would become an important data point for the GST Council. “Such reduction in growth of GST collection would become an important data point for the GST Council, which is reportedly set to consider increase in highest rate slab of 40 per cent to compensate for loss of revenue due to phase out of compensation cess after March, 2026, in its upcoming meeting which is likely to take place in July 2025,” he said.
Coming on the 8th anniversary of introduction of GST, Karthik Mani said, “…it is hoped that such muted growth in collection on a year-on-year basis is just an aberration and the GST collections would be back to its usual growth trajectory in the coming months.”
