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Economy 03-Feb, 2025

Gross GST collection in January increases 12.3% Y-o-Y; Union Budget 2025 targets improvement in GST compliance

By: Team India Tracker

Gross GST collection in January increases 12.3% Y-o-Y; Union Budget 2025 targets improvement in GST compliance

The highest ever GST collection was recorded in April 2024 at ₹2,10,267 crore. Image Source: Getty

The gross GST revenue collected from April 2024 to January 2025 was ₹18,29,073 crore.

According to the data on the Goods and Service Tax (GST) portal, the GST collection in January 2025 surged over 12.3 percent to touch ₹1.95 lakh crore. When compared to December 2023, when the GST collections were ₹1.66 lakh crore, the December 2024 receipts were ₹1.76 lakh crore, representing a 7.3 percent increase. But December's collections fell 2.97 percent from the month before, hitting a three-month low. The central GST collection in the month of January stood at ₹36,077 crore while the state GST collection was reported at ₹40,895 crore. Integrated GST or the IGST collections stood at ₹1,01,075 crore, a sharp increase as compared to ₹88,550 crore in January 2024. 

According to data, the growth in collection from imported commodities increased by around 20 percent, whilst the growth in collection from domestic sources increased by 10 percent. In the 10 months period of the current fiscal, rise in domestic and import was 10 percent and 7.4 percent respectively. The data explicitly shows that the consumption in December improved as the GST is levied on the end consumer. 

Commenting on the GST collections, M.S. Mani, partner, Deloitte India, said, “the steady pace of the GST collections resulting in a 9.4 percent growth (April-January) in revenues compared with the same period last year will help in exceeding the BE for FY25, if the pace is maintained for the next two months of the current fiscal year. The significant increase of 15 percent in refunds also indicates that both businesses and tax authorities are now completely familiar with the refund processes and their requirements.” 

“With significant increases in GST collections ranging from 10 percent to 20 percent in case of large States such as Tamil Nadu, Maharashtra, Gujarat, Telangana and Uttar Pradesh, it will be a matter of concern for both the State and Central GST authorities that similar large States such as Karnataka, Haryana, Rajasthan, MP, Punjab and West Bengal have shown increases in the range of only 5 percent to 9 percent,” he added. 

Himachal Pradesh (-7%), Mizoram (-10%), Manipur (-1%) and Lakshadweep (-4%) witnessed a decline in the GST revenue. 

Abhishek Jain, indirect tax head & partner, KPMG, said, “GST collections in January 2025 have shown an impressive growth of 12.5 per cent year on year. This consistent increase could indicate an uptick in economic growth and sustained tax compliance by businesses. Notably, the growth in collections despite higher refunds is commendable, suggesting improved efficiency in refund processing by the department — an encouraging step toward enhancing ease of doing business.” 

Source: Ministry of Finance

The gross GST revenue collected from April 2024 to January 2025 was ₹18,29,073 crore of which Central Goods and Service Tax (CGST) was ₹3,40,427 crore, State Goods and Service Tax (SGST) was ₹4,22,853 crore while the Integrated Goods and Service Tax (IGST) was ₹9,36,612 crore. The gross GST collection from the current fiscal year has increased by 9.4 percent year-on-year as compared to the same period in the last fiscal. 

The introduction and implementation of the Goods and Service Tax was a turning point in India’s history of taxation. In a diverse and federal nation like India, where many tax laws were unified into a single system, the adoption of this complete system was especially noteworthy. The GST is a value-added tax applied on the majority of goods and services sold for domestic consumption. Consumers pay the GST, but businesses that provide products and services remit it to the government. GST is levied on the 'supply' of goods or services, as opposed to the prior concept of levy on the manufacture of things, the sale of goods, or the provision of services. The rates of CGST, SGST, and IGST are mutually agreed upon by the Centre and the States. The rates are announced based on the GST Council's suggestion. In May 2015, the GST (122nd Constitutional Amendment) Bill, 2014 was enacted. It was enacted as the Constitution (101st Amendment) Act, 2016, and went into force on September 16, 2016. The GST was implemented on July 1, 2017.

The highest ever GST collection was recorded in April 2024 at ₹2,10,267 crore. The GST revenue collection was lowest in June 2021 at ₹92,800 crore. 

The government's overall revenue from taxes has been significantly boosted by the GST revenues. According to the Economic Survey for FY25, GST was the primary source of revenue for 23 States out of Own Revenue Receipts, with Manipur and Nagaland relying on it the most, at 78 percent and 72 percent, respectively. Over the course of its seven-year term, the GST Council has convened fifty-five times to provide recommendations regarding changes to the GST rate, streamlining GST compliance, and trade facilitation measures, among other things, in order to constantly support taxpayers. The Union Budget reiterated these remarks by proposing amendments to the Finance Bill.

The Union Budget reflects the government's Viksit Bharat vision, which emphasizes 'Make in India', export enhancement, and trade facilitation. In her Budget speech, the finance minister emphasized the tax department's commitment to 'trust first, scrutinise later', which, if implemented effectively, may make doing business in India easier and help create certainty for international companies. 

The 2025 Union Budget includes a number of reforms targeted at improving GST compliance and streamlining procedures. A crucial proposal contains an enabling provision that empowers the government to set requirements and restrictions for filing returns using the GSTN portal. This enables the development of a comprehensive GST compliance framework by matching procedural modifications with legal regulations to ensure that all changes to the GST filing process are legally supported.

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