Gross goods and Services Tax (GST) collections crossed Rs 2 lakh crore in March (for February transactions), registering a strong 8.8% year-on-year increase. This is the first time collections have crossed the Rs 2 lakh crore mark after the GST rate rationalisation in September, signalling strong consumption sentiment and a year-end spurt in transactions.
According to official data released by the Ministry of Finance on Wednesday, net GST revenue (after refunds) grew 8.2% to Rs 1.77 lakh crore, even as refunds rose 13.8% to Rs 22,074 crore. Gross GST collections for the full financial year (April–March) recorded an 8.3% rise to Rs 22.27 lakh crore.
Significantly, effective February 1, the GST compensation cess ceased to exist, and new rates of excise duty on tobacco products and health and national security cess on pan masala came into effect. The year-on-year growth rates exclude the compensation cess proceeds of March 2025.
The gross collection in March comprises Central GST (CGST) of Rs 40,549 crore, State GST (SGST) of Rs 53,268 crore, and Integrated GST (IGST) of Rs 1.06 lakh crore.
Strong Consumption
Manoj Mishra, Partner and Tax Controversy Management Leader at Grant Thornton Bharat, said March’s GST collections appear less like a routine year-end spike and more like a signal that the economy’s core demand engine remains intact despite emerging external headwinds. “Gross collections crossing the Rs 2 lakh crore mark, a 10-month high, and net revenues of about Rs 1.78 lakh crore indicate steady consumption, improved compliance, and a more efficient tax system,” he said. The data also showed that gross domestic revenue rose 5.9% to Rs 1.46 lakh crore, while gross GST revenue from imports stood at Rs 53,861 crore, up 17.8%.
MS Mani, Partner at Deloitte India, noted a significant increase in imports, which contributed to the rise in GST collections on imports. He added that this would also have led to a substantial increase in customs duty collections. Saurabh Agarwal, Tax Partner at EY India, said the GST data reveals a dual-speed narrative. “While robust collections and consistent refunds bolster the fiscal narrative, the persistent rise in import-related GST, coupled with a softening in export refunds, underscores a widening trade gap,” he said. To strengthen the Atmanirbhar Bharat vision, there is a clear need to recalibrate the PLI framework, he added.
Sequentially, GST collections grew 6.3% from Rs 1.88 lakh crore in February. The government had announced GST rate cuts on 375 items, including essentials, electronics, and automobiles, on September 3, with the changes taking effect from September 22, the first day of Navratri.
Import Surge
Experts noted that the March figures do not yet reflect the impact of the ongoing crisis in West Asia and anticipated a cautious trajectory ahead.
Ikesh Nagpal, Lead Indirect Tax at AKM Global, said that with rising crude prices amid geopolitical tensions and India’s high dependence on imports, the real impact on GST collections is likely to unfold in the coming months.
“Geopolitical headwinds and global inflationary pressures are likely to compress consumption demand. While traditional year-end sales may provide a tactical buffer, the mid-term outlook necessitates continued policy intervention to sustain manufacturing momentum amid global volatility,” said Saurabh Agarwal.