After a stellar rise in April and May, GST revenue growth slowed to a low single digit in June, owing to low mop-up from domestic transactions, indicating economic moderation.
In June 2025, gross GST collection was Rs 1.85 lakh crore, up 6.2% from Rs 1.74 lakh crore the year before. Only a 4.6% increase was seen this month in gross collections from domestic transactions, which make up 75% of monthly collections. Some semblance of respectability was restored when import/export revenue rose by 11.4%. In contrast to the 28.5% increase in refunds, the net GST collection for the month increased by just 3.3% to Rs 1.59 lakh crore.
After collecting more than Rs 2 lakh crore in April and May, there was a drop in June.
Key Highlights
- Gross GST collections hit ₹1.85 lakh crore in June, up 6.2% year-on-year, but dropped post-May peak.
- Net GST growth slowed to just 3.3%, weighed down by higher refunds and weak domestic transaction mop-up.
For the third time since the introduction of the GST in July 2017, gross GST collections rose by 16.5% in May to Rs 2.01 lakh crore. Gross GST collections hit a record high of Rs 2.36 lakh crore in April 2025, which was 12.6% more than the Rs 2.10 lakh crore collected in April 2024. Net GST revenues in May increased by 20.4% to Rs 1.74 lakh crore.
"After two consecutive months of Rs 2 lakh crore plus GST revenues and double-digit growths, Rs.1.85 lakh crore collections in June 2025 appears a little dampening," says Vivek Jalan, partner at Tax Connect Advisory Services LLP. However, Jalan claims that the 11.8% year-to-date growth in GST still results in a tax buoyancy of more than 1%, indicating that India remains in the "Goldilocks situation" amidst global turmoil.
In the first quarter of FY26, gross GST collection increased by 12% to Rs 6.22 lakh crore. The net collection increased by 10.7% to Rs 5.42 lakh crore.
"A 10.7% increase in net GST revenues in the first quarter of FY26, following strong revenue growth in FY25, provides the necessary fiscal headroom to embark on the next stage of GST reforms. While the growth in current month collections appears to be moderate when compared to previous months, it is important to note that growth during the quarter has been very positive," says M S Mani, Partner, Deloitte India.
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According to him, the moderate growth in collections in June 2025 is reflected in low single-digit increases in major states such as Maharashtra (6%), Karnataka (8%), and Tamil Nadu (4%), as well as a decline in monthly collections in Gujarat (-1%) and Uttar Pradesh (-4%).
Given the upcoming GST Council Meeting, businesses and tax experts anticipate significant rate rationalisation, simpler ITC processes, and easier compliance requirements for SMEs in the next wave of GST reforms.
