Friday, 20 Jun, 2025
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State-wise GST data shows uneven growth. Tamil Nadu led with a 25% surge, followed by Karnataka (20%) and Maharashtra (17%), driven by strong industry and services.
The Goods and Services Tax (GST) collections for May 2025 offer encouraging evidence that the economy is maintaining momentum. Net GST receipts rose 20.4 per cent compared to May last year, reaching Rs 1.74 lakh crore. This robust growth reflects continued consumer spending and business activity across the country. However, collections fell nearly 17 per cent from April’s record high of Rs 2.09 lakh crore, revealing that monthly tax inflows can be uneven and influenced by several factors.
Notably, the total GST collected before refunds, known as gross GST revenue, the figure stood at Rs 2.01 lakh crore in May—16.4 per cent higher than the same month in 2024. A standout feature is the sharp increase in GST from imports, which jumped 25.2 per cent. This surge shows that India’s appetite for imported goods remains strong despite global trade uncertainties, signalling resilience in international supply chains and consumer demand. Domestic GST collections, from goods and services produced and sold within the country, also rose by 13.7 per cent, indicating that the internal economy continues to chug along steadily. Also, strong GST collections generally indicate healthy consumer spending and business activity.
State-level GST collections reveal a mixed picture. Some states outpaced the national average by a wide margin. Tamil Nadu’s GST collections surged 25 per cent, Karnataka grew by 20 per cent, and Maharashtra by 17 per cent. These states are home to large industrial hubs and vibrant service sectors, which appear to be driving much of the growth. On the flip side, Andhra Pradesh experienced a 2 per cent decline in GST collections, while Telangana and Gujarat recorded more modest growth rates of 6 per cent and 4 per cent, respectively. These variations suggest that local economic conditions, such as the mix of industries, seasonal business patterns, and differences in tax compliance, are affecting GST performance state by state.
In April 2025, the number of e-way bills generated soared to nearly 119 million, marking the second-highest level ever recorded. This surge reflects a strong pickup in the transportation of goods, which usually means businesses are actively trading and producing.
Analysts say this divergence is important because it highlights that the country’s economic story is no longer just about national averages. States with stronger industries and services are powering ahead, while others face challenges that may need targeted attention. Such disparities highlight the complexity of managing a diverse economy like India’s, where regional strengths and weaknesses can shape the overall fiscal picture.
Economists and tax experts point out that the strong GST growth provides the government with “fiscal headroom”—essentially more resources to invest in infrastructure, social programmes, or debt management. But the uneven state-level data signals the need for more granular policy approaches. Instead of a one-size-fits-all strategy, supporting each state based on its unique economic makeup will be crucial to sustaining overall growth.
The May 2025 GST numbers reflect a growing economy with strong consumer and industrial activity, but also highlight important regional differences. The government faces the challenge of balancing growth and fiscal discipline while tailoring strategies to the needs of individual states. For India’s diverse economy, the real test will be sustaining this momentum in all regions, ensuring the benefits of growth are widely shared.
