Gross Goods and services tax (GST) collections rose 14.8% year-on-year to Rs 2 lakh crore in August (largely July transactions), driven by revenue from imported products and services, especially intermediate and capital goods, according to government data released on Tuesday. On a month-on-month basis, collections were, however, down 5.4% from July.

GST revenue after refunds rose 8.3% year-on-year in August to Rs 1.68 lakh crore with refunds increasing 70% to Rs 31,795 crore.

August was the second consecutive month when gross GST collections touched Rs 2 lakh crore, suggesting the revenue base is broadening and economic activity, particularly investment demand, continues to be resilient, tax experts said. The mop-up from the comprehensive destination-based indirect tax had touched an all-time high of Rs 2.42 lakh crore in April this year, helped by the fiscal year-end boost to transaction volumes in March.

ALSO READ

August was the seventh month since the introduction of GST in 2017 when collections were Rs 2 lakh crore or above.

The Indian economy has performed better than expected in the face of the war in West Asia, with GDP growth of 7.8% in April-June.

The August gross GST collection “reflects the continued strength of manufacturing, investment-led activity and the formal economy, complementing the robust GDP performance driven by higher capital formation and industrial expansion,” said Manoj Mishra, partner and tax controversy management leader, Grant Thornton Bharat.

“That said, the quality of collections warrants closer attention,” Mishra added.

The robust rise in GST collections was driven primarily by a 29% year-on-year growth in import revenue to Rs 62,604 crore. This, according to Mishra, indicates that trade-linked activity continues to make a disproportionately higher contribution to revenue buoyancy.

Domestic GST collections grew 9.3% in August to Rs 1.37 lakh crore. Domestic collections comprised Central GST (CGST) of Rs 38,413 crore, State GST (SGST) of Rs 46,316 crore, and Integrated GST (IGST) of Rs 52,520 crore.

The government has collected Rs 10.43 lakh crore in GST during April-August, 11% higher than the same period a year ago. Even after a near 24% rise in refunds during the first five months of FY27, net GST collections have risen 9%.

GST collections are expected to rise in the upcoming months thanks to higher consumer spending during the festive season.

“With monthly collections now consistently hovering around the Rs.2 lakh crore mark following the significant rate rationalisation undertaken last year, the focus can increasingly shift from revenue mobilisation to making the GST framework simpler and easier to comply with,” said Ikesh Nagpal, lead- indirect tax, AKM Global.

The GST Council is set to meet on September 12, more than a year after its last meeting where significant changes were undertaken including reducing the number of tax slabs to two from four earlier.

GST collections growth picked up in Arunachal Pradesh, Nagaland, Mizoram, Assam, Chhattisgarh, Ladakh, and Andaman and Nicobar Islands in August. This trend reflects “the broadening of economic activity beyond traditional industrial hubs and points to more inclusive, geographically balanced growth,” said Saurabh Agarwal, tax partner at EY India.

Maharashtra, Gujarat, Tamil Nadu, and Haryana continued to see the highest GST collections in August.