VIJAYAWADA: Despite a marginal negative growth rate of 2.24% in gross GST collections, Andhra Pradesh has demonstrated remarkable resilience and efficiency in tax collection, successfully reversing the downward trend observed in November and December 2024, asserts Babu A, Chief Commissioner of State Taxes.
In a detailed note issued Monday, he explained that the main reason for the negative growth was due to declines in Cess, SGST, and CGST payments, with reductions of Rs 52 crores (-20.02%), Rs 51 crores (-4.11%), and Rs 40 crores (-4.01%) respectively.
However he noted that the overall impact of these declines was minimal on the state’s actual revenue, as net revenue collections continue to demonstrate strong performance.
The resilience of net collections underscores the effectiveness of state-level tax administration and enforcement efforts in ensuring steady revenue inflows, he stated.
Further elaborating, Babu stated that the data from the Goods and Services Tax Network (GSTN), Central and State tax administrations showed divergent revenue trends during April-May 2025.
Central tax collections declined by 7.2% year-over-year, while state tax administrations recorded 2.3% growth during the same period.
State administration’s robust measures to boost tax collection yield results
“Without the Central tax administration’s negative performance, the overall gross GST collections would have shown a 3 % + growth rate instead of being dragged down by the Central component,” he said.
In May 2025, Andhra Pradesh recorded net GST collections of Rs 2,714 crores, marking the highest May collection since the introduction of the Andhra Pradesh Goods and Services Tax (APGST) Act in 2017.
This figure, coupled with an IGST settlement of Rs 1,524 crores, reflects a 4.49% growth over May 2024, highlighting the state’s robust fiscal framework. The increase in net collections, which represent the actual revenue available for state expenditure after IGST settlements, underscores strengthened tax compliance, improved settlement adjustments, and an expanded tax base.
Gross GST collections for May 2025 stood at Rs 3,803 crores, a 2.24% decline from Rs 3,890 crores in May 2024, primarily due to reduced Cess, SGST, and CGST contributions. Despite this, net collections grew by 4.49%, driven by a 12.34% increase in IGST settlements.
Sector-wise, GST collections grew by 4.49%, while subsumed acts like VAT on petroleum products and liquor saw growth rates of 3.04% and 13.84%, respectively. Profession tax collections surged by 67.73%, contributing to a total revenue of ` 4,201 crores, a 5.76% increase over May 2024. The state’s tax administration has implemented key measures to boost collections, including stricter enforcement of return filing deadlines, which improved compliance rates from 87% to 92% by March 2025.
Automated tax scrutiny, IGST credit reversals on exempted turnovers, and integration with the Registration Department and GSWS for arrears recovery have further strengthened revenue inflows. A targeted drive against defaulters, including asset and bank account seizures, has also proven effective.
Despite challenges, such as a reduction in petroleum product revenues due to policy shifts and a decline in central tax collections by 7.2% year-over-year, state tax administrations recorded a 3.2% growth in April-May 2025.
The State’s focus on recovering GST and VAT arrears, coupled with improved compliance, has mitigated the impact of these challenges. Net revenue collections, which grew by 0.06% compared to the previous year, remain the most accurate indicator of AP’s fiscal health, reflecting stable SGST revenues driven by local consumption patterns.
The marginal growth in FY 2024-25 is partly due to an Amnesty Scheme waiving penalties and interest for tax demands from 2017-2020, limiting revenue to principal amounts. Additionally, the absence of a functioning GST Appellate Tribunal has delayed arrears recovery, as taxpayers face legal stays on enforcement actions.
Nevertheless, AP’s tax collection performance signals effective fiscal management, positioning the state for continued financial stability.