After showing stellar rise in April and May, the growth in GST revenue dropped to low single digit in June primarily due to low mop-up from domestic transactions, indicating moderation in economic activities.
The gross GST collection showed a growth of 6.2% to Rs 1.85 lakh crore in June 2025 compared to Rs 1.74 lakh crore a year ago. Gross collections from domestic transactions – which account for 75% of the monthly collections – grew by only 4.6% during the month. Collections from imports/exports rose by 11.4%, bringing some semblance of respectability. The net GST collection during the month was even worse, growing at a paltry 3.3% to Rs 1.59 lakh crore, as refunds grew by 28.5%.
The slump in June comes after two back-to-back months of over Rs 2 lakh crore collection in April and May.
Gross GST collections in May rose by 16.5% to Rs 2.01 lakh crore – only the third time since GST came into force in July 2017. In April, gross GST collections hit an all-time high of Rs 2.36 lakh crore in April 2025, 12.6% higher than the collection of Rs 2.10 lakh crore in April 2024. Net GST revenues in May showed even better buoyancy as the same increased by 20.4% to Rs 1.74 lakh crore.
“After two successive months of Rs 2 Lakhs Crore plus GST revenues and double-digit growths, Rs.1.85 lakh crore collections in June 2025 seems a little dampening,” says Vivek Jalan, partner, Tax Connect Advisory Services LLP. However, Jalan says that the year-to-date 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.
In the first quarter of FY26, the gross GST collection grew at 12% to Rs 6.22 lakh crore. The net collections grew by 10.7% to Rs 5.42 lakh crore.
“An increase of 10.7% in the net GST revenues in the first quarter of 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 collections seems moderate compared to earlier months, it is essential to note that the growth during the quarter has been very positive,” says M S Mani, Partner, Deloitte India.
According to him, the moderate growth in collections during June 2025 is also reflected in the low single digit increases in major states like Maharashtra (6%), Karnataka (8%) and Tamil Nadu (4%) and the decline in monthly collections in Gujarat (-1%) and UP (-4%).
Considering the fact that the next GST Council Meeting is on the anvil, businesses and tax experts are expecting significant rate rationalisation, simpler ITC processes and easier compliance requirements for SMEs in the next wave of GST reforms.