Net GST collection in March jumps 7.3% to ₹1.77 tn, showing success of self reliance

New Delhi: Central and state governments collected ₹1.77 trillion in Goods and Services Tax (GST) in March after adjusting for refunds, 7.3% more than receipts in the same time a year ago, official data showed.

In FY25, GST collections jumped 8.6% after adjusting for refunds, to ₹19.56 trillion, data from GSTN, the state-owned company that processes tax returns, showed.

GST refund of ₹19,615 crore was given in March and in the just-ended financial year, ₹2.52 trillion was given, data showed.

Net tax revenue from domestic sales grew 9.3% annually to ₹1.38 trillion in March, while revenue from imports—integrated GST (IGST) proceeds—remained nearly flat at ₹38,830 crore. Merchandise imports had declined by 16% annually in February to $50.96 million, data from commerce ministry showed.

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Tax on transactions conducted in February is collected in March.

On an annual basis, net GST revenue from domestic sales grew 10.1% but IGST revenue and applicable cess on the imports grew only by 3.5%. This could reflect the success of several import substitution measures, focusing on Atma Nirbhar Bharat and success of some of the production linked incentive schemes, said M.S. Mani, partner- indirect taxes at Deloitte India.

Before adjusting for tax refunds, revenue collection stood at ₹1.96 trillion in March, showing a 9.9% annual growth and at ₹22 trillion in the just-ended financial year, showing a 9.4% annual growth.

Resilient economy

The sustained growth in GST collections suggests a resilient domestic economy, seemingly insulated from global economic challenges, driven by strong consumer spending, said Saurabh Agarwal, tax partner at EY.

Federal indirect tax body, the GST Council is currently exploring further tax rate rationalization, which could simplify the GST structure, remove tax anomalies like raw materials attracting higher taxes than finished products and offer tax relief on certain products and services. A ministerial panel with Bihar deputy chief minister Samrat Chaudhary is examining proposals in this regard. The panel’s recommendations could figure in the next GST Council meeting.

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Among large state economies, Uttar Pradesh reported a 10% annual jump in GST revenue receipts in March, while Maharashtra reported a 14% improvement. Gujarat reported a 6% growth, while Tamil Nadu showed a 7% growth. Delhi reported a 5% GST revenue growth in March.

Experts pointed out that proceedings regarding short-payment of tax completed for the preceding three financial years have aided in the tax collection growth in FY25. Improved data collection and reporting requirements have also helped in tax collection growth, they said.

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