India's Goods and Services Tax (GST) collection for March 2025 has seen a remarkable increase, growing by 9.9% to over ₹1.96 lakh crore, marking the second-highest revenue collection ever recorded. This surge in GST revenue reflects a robust economic environment and effective tax compliance among businesses, according to government data released on Tuesday.
The gross GST collection during the fiscal year from April 2024 to March 2025 stands at ₹22.08 lakh crore, showcasing a year-over-year growth of 9.4%. The revenue generated from domestic transactions alone rose by 8.8%, reaching ₹1.49 lakh crore, while revenue from imported goods increased significantly by 13.56% to ₹46,919 crore.
The breakdown of the gross collection reveals that the Central GST contributed ₹38,145 crore, the State GST accounted for ₹49,891 crore, and the Integrated GST (IGST) amounted to ₹95,853 crore. Additionally, cess collection during March was reported at ₹12,253 crore. However, total refunds issued during the month surged by 41% to ₹19,615 crore, indicating a dynamic adjustment in the tax landscape.
After accounting for these refunds, the net GST revenue for March 2025 stood at over ₹1.76 lakh crore, reflecting a 7.3% growth compared to the same period last year. This growth trajectory is particularly noteworthy as it comes on the heels of a record high of ₹2.10 lakh crore in GST collection achieved in April 2024.
Deloitte India’s Partner, MS Mani, commented on the impressive figures, stating, "The 9.9% increase in gross GST collection for the month reflects the impact of year-end sales push by businesses. It is very encouraging to see that this is not an isolated instance as GST collections have shown a steady increase every month reflected by the 9.4% increase in annual Gross GST collections."
Mani also pointed out the disparities in growth rates across various states, noting, "There continues to be a wide variation in the growth rates of GST collections across key manufacturing and consuming states. While states like Maharashtra, Haryana, Uttar Pradesh, and Rajasthan have shown a growth exceeding 10%, other states like Gujarat, Karnataka, Telangana, Andhra Pradesh, and Tamil Nadu have been in the range of -1% to 7%, which is very unusual for the month of March. There is a need to understand the reasons for the same by evaluating the sectoral growth and compliance rates in these states."
KPMG in India’s Partner and Head of Indirect Tax, Abhishek Jain, echoed this sentiment, emphasizing that the nearly 10% growth in collections compared to last year is indicative of economic stability and strong tax compliance among companies. Jain stated, "With fiscal year-end adjustments and reconciliations underway, we can expect a further surge in month-on-month growth in the next set of collection."
The GST system, implemented in July 2017, has undergone various modifications aimed at simplifying tax compliance and enhancing revenue collection. The recent figures suggest that these efforts are yielding positive results, contributing to the overall health of the economy.
As businesses prepare for the new fiscal year, analysts and tax experts will be closely monitoring the trends in GST collections, especially in states that have shown slower growth. The variations in performance across states could indicate underlying economic challenges or opportunities that need to be addressed.
Moreover, the continued growth in GST collections is crucial for financing government expenditures, especially in a time when economic recovery post-pandemic remains a priority. The revenue generated through GST is vital for funding social programs, infrastructure projects, and public services.
In summary, the March 2025 GST collection figures reflect a strong rebound in economic activity, driven by effective tax compliance and a year-end sales surge. As the government looks to maintain this momentum, the focus will also be on ensuring equitable growth across all states, addressing disparities, and fostering a conducive environment for businesses.
With the current trajectory, stakeholders are optimistic about the potential for sustained growth in GST revenues, which could play a pivotal role in India's broader economic strategy.
