Gross Goods and services tax (GST) collections rose 15.4% year-on-year to a 3-month high of Rs 2.11 lakh crore in July (largely June transactions), driven the tax on imported goods, according to government data released on Saturday. On a month-on-month basis, GST collections were up 8.4% from June.
Net GST revenue (post-refunds) rose 15.8% on year in July to Rs 1.81 lakh crore with refunds increasing 13.1% to Rs 29,968 crore.
The year-on-year growth in July was the highest in the current financial year, reflecting a strengthening revenue base and underlying resilience in economic activity despite the external uncertainties, tax experts said.
The robust rise in GST collections was driven primarily by a 28.8% on-year growth in import revenue to Rs 66,511 crore. “One cannot ignore the elevated levels of import GST collections, which remain a nagging concern,” said Saurabh Agarwal, tax partner, EY India. “This points to a persistent gap in domestic manufacturing capability despite the range of successful PLI and Atmanirbhar Bharat interventions rolled out over the past few years.”
Domestic GST collections were also robust in July, rising 10.1% to Rs 1.45 lakh crore. Domestic collections comprised Central GST (CGST) of Rs 39,835 crore, State GST (SGST) of Rs 47,881 crore, and Integrated GST (IGST) of Rs 56,979 crore.
Net domestic GST collections rose 10.5% year-on-year in July. This indicates that “the economy is beginning to fully absorb the benefits of the GST rate rationalisation exercise, with stronger consumption translating into higher domestic revenues,” said Mahesh Jaising, partner and indirect tax leader, Deloitte India.
The government has collected Rs 8.43 lakh crore in GST during April-July, 10.1% higher from the same period a year ago. Even after a near 16% rise in refunds during the first four months of FY27, net GST collections have risen 9.2%.
“If this momentum continues over the next few months, it could provide the Government with the confidence to accelerate the next phase of GST reforms as the regime approaches its 10-year milestone,” said Pratik Jain, partner, Price Waterhouse & Co. “These reforms may span structural, legislative and administrative measures. GST 3.0 may no longer be a distant idea. It could be closer than many expect.”
Manufacturing and services driven states such as Haryana, Gujarat, and Maharashtra saw sharp growth in GST collections in July. This signals that private investment cycles are picking up, experts said. Haryana saw a 25% year-on-year growth in GST collections, Gujarat 19%, and Maharashtra 13%.