GST Collections Rise 8.5% In November But Seen Muted For Rest Of Fiscal 2025

India's GST collections in November showed annual growth but a marginal dip sequentially---a trend experts indicated could continue for the rest of the fiscal.

GST collections grew 8.5% year-on-year to Rs 1.82 lakh crore in November, according to a government datasheet on goods and services tax released on Sunday, 1 December. The Central GST collections stood at Rs 34,141 crore, the state GST collections at Rs 43,047 crore, Integrated IGST at Rs 91,828 crore and cess at Rs 13,253 crore.

The 8.5% growth was mainly on account of domestic transactions, which grew 9.4 % to Rs 1.40 lakh crore, while revenue from tax on imports rose about 6% to Rs 42,591 crore.

Refunds shrank 8.9% from the year-ago period to Rs 19,259 crore. And after adjusting refunds, net GST collection increased by 11.1% to Rs 1.63 lakh crore in November.

In October, the GST collections rose 9% year-on-year to Rs 1.87 lakh---the second-highest ever on account of higher sales and improved compliance. In September, the mop-up stood at Rs 1.73 lakh crore.

So far this fiscal, the exchequer has mopped up Rs 14.57 lakh crore in GST.

GDP & GST

At 5.4%, India's economy grew at its slowest pace in almost two years in July-September, dampening the growth outlook for the full year. The slump was largely due to weaker manufacturing, mining and electricity and gas production.

That weakness is likely to show in muted GST collections as well.

“Considering the recent GDP data for the September 2024 quarter, we anticipate a slowdown in tax collections over the next four months," said Saurabh Agarwal, tax partner at EY. "The global geopolitical scenario and potential consumer spending cuts could further exacerbate short-term economic growth."

While the recent surge in tax collections—especially in states like Delhi, Maharashtra, and Karnataka—can be linked to the festive season, it's too early to celebrate this as a broader economic trend. In fact, month-on-month collections have declined despite festive boost, Agarwal said.

Experts also expressed concerns over negative growth in some of the manufacturing states of Rajasthan and Chhattisgarh. That could have considerable economic impact.

“The slower single-digit growth in some large states like Haryana (2%), Punjab (3%), UP & MP (5%), Tamil Nadu (8%), Telangana (3%) as well the negative growth in Rajasthan (-1%), Andhra Pradesh ( -10%), Chhattisgarh (-1%) would be an area of concern as they have significant manufacturing presence and considerable economic impact," said MS Mani, partner at Deloitte India.

Delhi, Maharashtra and Karnataka witness uptick in GST collections mainly due to festive demand. Besides, the mop-ups in Jammu & Kashmir, Bihar, Sikkim, Mizoram, Tripura, Assam, and Odisha pointed towards positive economic momentum in these regions.

“The domestic GST revenue growth of 10%-plus in FY25 seems to support the GDP data which indicates increase in domestic consumption," Mani said. "The import GST revenue growth of 6% also backs foreign trade data which indicates slower growth of non-petroleum imports."

Brighter Outlook

Still, India's projected GDP growth rate of 7% in FY25 augers well for GST collections in the remaining four months. That collections in the first eight months have exceeded last year's tally by over Rs 1 lakh crore and are ahead of the budget estimates for FY25 also augur well, Mani said.

The 9.4% growth in GST collections from domestic sales and overall growth of 8.5% is impressive despite muted GDP growth negative mop-up in a few states and union territories, noted Abhishek Jain, indirect tax head & partner at KPMG.