India’s gross Goods and Services Tax (GST) collections rose by 6.2% year-on-year to ₹1.84 lakh crore in June 2025, the Finance Ministry said on Tuesday. The number, while reflective of continued economic activity and compliance, fell below the ₹2 lakh crore mark crossed in April and May — prompting caution among economists and tax experts.Gross GST collections stood at ₹1.73 lakh crore in June 2024. In comparison, the revenue in April 2025 had touched a record ₹2.37 lakh crore, while May’s mop-up was ₹2.01 lakh crore.
Collection Breakdown
As per the official statement, the components of the ₹1.84 lakh crore collected in June 2025 include:
Central GST (CGST): ₹34,558 crore
State GST (SGST): ₹43,268 crore
Integrated GST (IGST): ₹93,280 crore
GST Cess: ₹13,491 crore
GST collections from domestic transactions rose by 4.6%, while revenues from imports surged by 11.4% to ₹45,690 crore.Additionally, total refunds processed during the month stood at ₹25,491 crore, marking a significant 28.4% increase compared to the same period last year.The net GST collection, after adjusting for refunds, came in at ₹1.59 lakh crore — a 3.3% rise year-on-year, but an 8.48% decline month-on-month, compared to May’s net collections.Analysts Weigh In: Slowing Momentum a Cause for CautionCommenting on the June numbers, Karthik Mani, Partner – Indirect Tax at BDO India, observed:“The net GST collections for June 2025 have shown quite muted growth of 3.3% on a year-on-year basis. Looking at the numbers on a month-on-month basis, the net GST collections have shown a reduction of around 8.48%, with collections from the domestic market as well as imports showing a decline.”Mani further pointed to the importance of these numbers in the context of the upcoming GST Council meeting, where structural concerns such as rate rationalisation may be discussed: “Such a reduction in growth of GST collection would become an important data point for the GST Council, which is reportedly set to consider increasing the highest rate slab to 40% to compensate for the loss of revenue due to the phase-out of compensation cess after March 2026.”State-Wise Trends: A Mixed BagThe performance across states was uneven. While larger states such as Maharashtra (6%), Karnataka (8%), Tamil Nadu (4%), West Bengal, and Rajasthan reported moderate to healthy increases, Uttar Pradesh (-4%), Punjab, and Gujarat (-1%) saw a contraction.States such as Haryana, Bihar, and Jharkhand posted median increases of around 10% in gross collections.Saurabh Agarwal, Tax Partner at EY India, noted that headline numbers may not tell the full story — “The domestic GST collections for June 2025 present a nuanced picture. While the overall growth appears muted, likely influenced by the prevailing geopolitical uncertainties and their impact on consumer sentiment, we must look beyond the top-line numbers.”Agarwal pointed to regional growth in smaller states and Union Territories as a positive signal “It’s heartening to see strong pockets of growth in regions like Nagaland, Sikkim, Tripura, Lakshadweep, and Ladakh. This suggests increased consumer activity and continued government thrust on infrastructure in these areas — a positive indicator for regional development.”He also underscored the significance of higher refunds– “The rise in GST refunds for exports is a clear sign of robust cross-border transactions and a strong export environment. It also reflects the government’s commitment to addressing working capital issues for businesses.”Demand Concerns and Consumer SentimentPratik Jain, Partner at Price Waterhouse & Co LLP, linked the moderate GST growth to weak demand indicators elsewhere in the economy — “Around 6% growth in GST collections, coupled with less than 4% growth in advance tax collection for the first quarter of FY26, does indicate softening of demand and a cautious outlook. One of the reasons could be conservative spending by consumers, which may improve in the next couple of months with the overall geopolitical situation improving.”Quarterly Growth Trend Remains EncouragingDespite the June dip, GST collections for the first quarter of FY26 continue to post healthy gains. Abhishek Jain, Indirect Tax Head and Partner at KPMG India, stressed that “It’s good to see GST collections grow by around 12% in the first quarter compared to last year. It shows that economic activity and compliance continue to hold strong. The rise in net refunds, especially the sharp jump from last month, is also welcome news for businesses as it helps ease cash flows.”MS Mani, Partner at Deloitte India, echoed a similar sentiment and added “An increase of 10.7% in the net GST revenues in Q1 FY26, coming on the back of good revenue growth across FY25, provides the requisite fiscal headroom for embarking on the next stage of GST reforms. While the growth in the current month’s collections seems moderate compared to earlier months, it is essential to note that the growth during the quarter has been very positive.”Mani further said that the moderation in state-wise growth, with low single-digit increases in major states and declines in others, reflects the broader economic cooling.Still in the Goldilocks Zone?Vivek Jalan, Partner at Tax Connect Advisory Services LLP, described the June figures as “a little dampening,” particularly after back-to-back ₹2 lakh crore months.“After two successive months of ₹2 lakh crore-plus GST revenues and double-digit growth, ₹1.85 lakh crore collections in June 2025 seem a little underwhelming primarily because of the 6.2% YoY growth. However, the YTD growth of 11.8% in GST still gives a tax buoyancy of more than 1%, which means that India is still in the ‘Goldilocks situation’ amidst global turmoil.”Jalan added that stable growth, controlled inflation, and rising private investments should help India stay on course to meet its FY26 GST targets.Eight Years On: GST’s Evolution into a Revenue MainstayAs the indirect tax system marks its eighth anniversary, tax professionals are reflecting on its progress and future.Vivek Baj, Partner at Economic Laws Practice, observed that “Eight years after its rollout, GST stands tall as a fiscal powerhouse. The government has embraced deep digitalisation and streamlined GST processes, giving businesses more time to focus on growth rather than paperwork.”According to Baj, the results are showing that “In FY 2024–25, annual GST collections have doubled in just five years to a record ₹22.08 lakh crore. The momentum has continued with April 2025 hitting ₹2.37 lakh crore and May at ₹2.01 lakh crore. Import-led IGST captured the spotlight with a 25% surge, fueled by robust global trade and strong customs collections.”Looking ahead, he underlined the need for further policy fine-tuning, including rate rationalisation, expansion of GST to sectors like petroleum, and operationalising the long-awaited GST Appellate Tribunal (GSTAT).“As GST celebrates its eighth birthday, it stands as a hallmark of India’s economic modernisation. The focus must now be on ensuring GST continues to support growth, equity, and ease of doing business.”What NextWith the next GST Council meeting expected later this month, discussions around rate simplification, tax base expansion, and compliance burden reduction—particularly for MSMEs—are likely to dominate the agenda.Despite June’s slip below the ₹2 lakh crore mark, most analysts agree that GST remains on a strong structural footing, with room for recalibration rather than concern.The coming months—and the Council’s decisions—will determine whether June’s dip was a seasonal blip or an early indicator of shifting macroeconomic winds.
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