India’s gross Goods and Services Tax (GST) collections rose to ₹1,95,735 crore in July 2025, marking a 7.5% year-on-year increase from ₹1,82,075 crore in July 2024, according to provisional data released by the Ministry of Finance. The increase, driven by higher collections from both domestic transactions and imports, signals continued economic activity, although the pace of growth has moderated.On a year-to-date basis (April–July), gross GST revenue surged 10.7% to ₹8.18 lakh crore, up from ₹7.39 lakh crore in the same period last year.
The total gross GST revenue for July 2025 comprised:
Central GST (CGST): ₹35,470 crore
State GST (SGST): ₹44,059 crore
Integrated GST (IGST): ₹1,03,536 crore (including ₹51,626 crore collected on imports)
Compensation Cess: ₹12,670 crore (including ₹1,086 crore collected on imports)
Net revenues rise marginally amid higher refundsAfter adjusting for refunds, net GST revenue for July stood at ₹1,68,588 crore, registering a modest 1.7% increase from ₹1,65,800 crore in July 2024. This subdued growth was largely due to a 66.8% increase in total refunds, which rose to ₹27,147 crore in July 2025 from ₹16,275 crore a year ago.Despite the tepid monthly growth, cumulative net GST revenue for April–July 2025 rose 8.4% to ₹7.11 lakh crore compared to ₹6.56 lakh crore during the same period last year.“The growth in net monthly collection is only 1.7% as against YTD growth of 8.4%, though partly attributed to significant increase in refunds,” said Pratik Jain, Partner, Price Waterhouse & Co LLP. “After a tepid growth in the previous month as well, the GST Council may like to discuss the possible measures to augment the revenues in the next meeting. With compensation cess going away, the States may also be a bit more concerned about the slowdown in GST collections.”State-Wise revenue performance: East and Northeast shineSmaller northeastern states showed robust year-on-year growth:
Tripura: 41%
Meghalaya: 26%
Sikkim: 23%
Nagaland: 22%
Among larger states, Madhya Pradesh led with 18% growth, followed by Bihar (16%), Andhra Pradesh (14%), and Punjab and Haryana (12% each).Maharashtra, the top GST-contributing state, collected ₹30,590 crore in July 2025, up 6% year-on-year.
Karnataka and Tamil Nadu posted 7% and 8% growth respectively.Gujarat registered a muted 3% increase, while Delhi and Uttar Pradesh showed modest growth of 2% and 7% respectively.Some states recorded declines:
Manipur: -36%
Mizoram: -21%
Jammu & Kashmir and Chandigarh: -5% each
Expert views: Stable trend, but structural warningsWhile several tax experts noted signs of stability and economic resilience, others flagged underlying issues.Saurabh Agarwal, Tax Partner, EY India, said, “The latest GST collections are a positive sign for the Indian economy. Despite some global pressures and temporary dips, the overall trend shows a stable consumption pattern. It’s encouraging to see strong growth in collections from states like Sikkim, Nagaland, Meghalaya, Tripura, etc., which points to a more balanced development across the country. The government’s timely refund process is also a great help to businesses, ensuring they have the working capital they need.”He added, “Looking at the year-to-date figures, the robust GST collections confirm that the Indian economy is on a consistent growth trajectory, which is a testament to its resilience. While we may see some seasonal moderation in August, the overall trend is very positive and a clear indicator of India’s robust economic growth.”MS Mani, Partner, Deloitte India, explained, “GST revenues for the past few months have been on an upward trajectory. The muted increase of 1.7% in net collections for the month and 8.4% during the year can be attributed to increased refunds. During the month, domestic refunds have more than doubled compared to the same month last year, and during the current year refunds have increased by 46%.”He added, “This increase in refunds augurs well for businesses as it indicates stability in the online refund processes and quicker refund sanctions. However, the GST revenue data shows that gross domestic revenue has increased by only 9%, compared to import revenues which have gone up by 16%, despite the focus on domestic manufacturing and import substitution.”Mani also pointed out that growth in state revenues among large producing and consuming states has been very low: Delhi (2%), Gujarat (3%), Rajasthan (4%), Maharashtra (6%), Karnataka (7%), and Tamil Nadu (8%). “There are few bright spots in terms of Punjab, Haryana, West Bengal (12%), Andhra Pradesh (14%), and Madhya Pradesh (18%),” he said.Vivek Jalan, Partner at Tax Connect Advisory, flagged a worrisome trend: “For the first time in July 2025, possibly since the Covid year in 2020–2021, the net domestic GST revenue has de-grown year-on-year, which shows that the consumption sentiment in the country is not very positive.”He added that the 117% rise in domestic refunds—many of which may be due to inverted duty structures—should push the government to expedite GST rate rationalisation. “While the government has removed inverted duty structure on many goods previously, certain new-age goods still suffer. For example, lithium-ion batteries are liable to 18% GST, but parts of lithium-ion batteries may still be at 28%. This leads to inefficiencies in the GST system,” Jalan noted.Abhishek Jain, Indirect Tax Head & Partner, KPMG India, said the increased refunds reflect a maturing GST regime. “It’s heartening to see GST refunds picking up, not just for exports but also for domestic supplies. This reflects maturity of the GST regime. Higher refunds on domestic supplies could be from excess tax payments, inverted duty structures, and other adjustments. The increased refunds should aid cash flows for businesses,” he said.Outlook: Reform push likely amid festive upswingWith festive demand expected to pick up from September and FY26 GDP growth projected around 7%, GST collections are likely to stay buoyant in the coming months. The government’s continued focus on widening the tax base, digitisation of compliance, and AI-driven audits is also expected to bolster revenue generation.However, the divergence in state-level performance and the impact of structural inefficiencies such as inverted duty structures may prompt the GST Council to revisit tax rationalisation and revenue augmentation measures in its next meeting.Bottom lineWhile headline GST numbers for July 2025 reflect continued economic activity and compliance maturity, the muted net revenue growth due to increased refunds—combined with regional disparities—indicates that India’s indirect tax system is entering a phase where targeted reforms may become necessary to sustain long-term momentum.
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