India’s Goods and Services Tax (GST) collections kicked off the new fiscal year on a strong note, with gross revenues rising 8.7% year-on-year to ₹2.42 lakh crore in April 2026.The sharp 21% month-on-month jump reflects the usual year-end surge in March transactions flowing into April filings, but a closer look at the data reveals a more layered story—one driven by strong import-linked collections, rising refunds, and compliance-related adjustments.April spike: seasonal strength, not a one-offExperts say April’s strong showing is part of a recurring seasonal pattern rather than an outlier. Ikesh Nagpal, Lead–Indirect Tax at AKM Global, said, “April GST collections are typically elevated, and their consistent peak year after year is no coincidence. The year-end push in March driven by higher sales, inventory clearances, and book closures naturally spills over into April, making it the strongest month across most fiscal cycles.”He added that the April 2026 collections “signal a robust start to the financial year, with 8.7% YoY growth, led by a sharp 25.8% surge in import-driven revenue, underscoring resilient consumption and trade linkages, even amid GST 2.0 changes and ongoing global uncertainties.”Nagpal also highlighted the concentration of collections among key states, noting that “Maharashtra (₹42,467 crore), Karnataka (₹18,939 crore), and Gujarat (₹15,620 crore) continue to dominate, reflecting the role of high-output, high-consumption regions in driving overall revenues.”
Manoj Mishra, Partner at Grant Thornton Bharat, said April’s record GST collections signal underlying strength, with steady domestic consumption, a sharp rise in import revenues, and higher refunds reflecting both demand resilience and improved liquidity. He added that strong contributions from large states underscore compliance depth, with GST trends aligning with India’s broader demand-led growth despite global headwinds.
Import-led growth takes centre stageA key highlight of April’s collections was the continued dominance of import-linked GST revenues. IGST collections on imports rose nearly 26% year-on-year, while net customs GST revenues surged 42.9%, indicating robust trade flows despite global volatility.MS Mani, Indirect Tax Partner at Deloitte India, said the trend of IGST on imports contributing significantly to overall GST collections has continued this month as well. “This indicates that imports are on the upswing, but in the absence of customs collections data, it is difficult to pinpoint the reasons for the steep increase,” he noted.Echoing this, Vivek Jalan of Tax Connect Advisory Services LLP said the surge in import-linked GST reflects higher import costs amid global supply chain disruptions and commodity movements. “The surge was powered by a 42.9% jump in net customs GST collections,” he added.Domestic consumption steady, but growth moderateWhile imports powered overall growth, domestic GST collections remained relatively moderate. Gross domestic revenues rose 4.3% year-on-year to ₹1.85 lakh crore, suggesting stable consumption trends even after GST rate cuts implemented in September 2025.Mani pointed out that “GST collections on domestic consumption have shown moderate growth compared to the previous year, despite sharp rate reductions, indicating a good increase in domestic consumption on a comparable rate basis.”However, the growth was not uniform across states. He added that several large manufacturing and consuming states reported low single-digit growth—“including Gujarat at 3% and Maharashtra, Karnataka and Haryana at around 5%—which requires deeper sectoral analysis.”Refund surge tempers net revenue growthDespite strong gross collections, net GST revenue growth was relatively muted at 7.3% year-on-year, reaching ₹2.11 lakh crore, largely due to a sharp increase in refunds.Total refunds rose 19.3% year-on-year, with domestic refunds jumping over 54%, even as export refunds declined. This reflects both structural issues like inverted duty structures and improvements in refund processing.Jalan highlighted that “net domestic collections remained flat as refunds—primarily under the inverted duty structure—spiked significantly.” He added that input tax credit accumulation, especially on services, continues to increase business costs and has been flagged for correction at the upcoming GST Council meeting.Compliance changes and litigation add to inflowsApril’s collections were also influenced by compliance-driven factors. According to Jalan, pre-deposits linked to enforcement actions under Section 74 for FY20 and changes in ITC set-off sequencing on the GST portal played a role in supporting revenues.“These factors highlight how domestic GST revenues are being maintained—anchored by compliance recalibrations, litigation-driven pre-deposits, and structural refund dynamics,” he said.Experts see resilience in GST frameworkExperts believe the April numbers underscore the resilience of India’s GST system, even if part of the surge is cyclical.Abhishek Jain, Partner at KPMG, said, “While year-end adjustments invariably provide a cyclical boost, a record of this magnitude reflects an underlying economic resilience that cannot be entirely discounted.” He added that stable revenue buoyancy points to stronger tax administration, digital enforcement, and a widening tax base.Policy recalibration may be neededAt the same time, the divergence between strong import growth and moderate domestic consumption has raised concerns about the sustainability of the current trajectory.Saurabh Agarwal, Tax Partner at EY India, said, “While the headline numbers are encouraging, the divergence between modest domestic GST growth and the significant uptick in import-linked collections warrants a strategic pivot.”He emphasised the need to strengthen domestic manufacturing, adding that policy frameworks must ensure the “Make in India” initiative keeps pace with global supply chain shifts. Agarwal also noted that faster refund processing is a positive for liquidity, ensuring that rate rationalisation does not hinder industrial momentum.Expect moderation aheadWhile April’s collections mark a strong start to the fiscal year, experts caution that the momentum may not sustain at the same pace.Agarwal noted that April figures reflect the year-end push by businesses and tax authorities, and “collections are likely to stabilise in the coming months, with a sequential dip expected as the market recalibrates.”April 2026 GST collections highlight a maturing tax system supported by technology, compliance improvements, and policy adjustments. However, the data also reveals a growing dependence on import-driven revenues and the increasing impact of refunds on net collections.In March, GST collections had risen 8.8% year-on-year to over ₹2 lakh crore, driven by a 5.9% increase in domestic revenues to ₹1.46 lakh crore and a sharper 17.8% jump in import-related revenues to ₹53,861 crore, according to official data.February GST collections had also grown 8.1% to ₹1.83 lakh crore, with data pointing to structural drivers such as import-led buoyancy, better compliance and stabilising revenue trends despite rate rationalisation under GST 2.0.As the fiscal year progresses, the balance between domestic demand and external trade—and the ability of policy measures to sustain both—will be critical in determining the trajectory of GST revenues.
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