NEW DELHI: Gross and net goods and services tax (GST) collections rose 8.3 per cent and 7.1 per cent, respectively, in 2025-26, a year that witnessed a major rate rationalisation in September. Annual gross revenue growth was the slowest since the Covid-hit 2020-21, when collection contracted by 7 per cent.
In March, net GST collections increased 8.2 per cent year-on-year, the strongest pace in six months following the rollout of the GST 2.0 regime, according to government data released on Wednesday. Gross collections rose 8.8 per cent, supported by a sharp uptick in import revenues.
In absolute terms, gross and net GST collections stood at ₹22.27 trillion and ₹19.35 trillion (excluding cess), respectively. March gross collections exceeded ₹2 trillion — the highest since May 2025 — while net collections reached ₹1.70 trillion, the second-highest monthly figure in 2025-26 after April’s ₹2.09 trillion. On a sequential basis, collections rose 9 per cent and 10 per cent, respectively.
Net central GST (CGST) revenue for FY26 stood at ₹4.05 trillion; net compensation cess for the year was ₹99,039 crore.
The central government had budgeted ₹11.78 trillion as its GST revenue target (CGST plus compensation cess) for 2025-26. Following the September rate cuts aimed at boosting consumption, the revised estimate was lowered to ₹10.46 trillion.
March revenues from imports rose 17.8 per cent to ₹53,861 crore, while domestic transaction revenues increased 5.9 per cent to ₹1.46 trillion.
Total GST refunds grew 13.8 per cent year-on-year to ₹22,074 crore. Domestic refunds rose 31.2 per cent, while import-related refunds declined 10.6 per cent.
The Centre discontinued the compensation cess from February 1, 2026, with only residual or transitional amounts reported thereafter for prior transactions. Net cess revenue was marginal (provisional data indicates about ₹177 crore), consistent with the phaseout.
Analysts said the crossing of the ₹2 trillion mark in monthly gross collections reflects underlying economic resilience, while highlighting emerging divergences within the data.
Saurabh Agarwal, tax partner at EY India, said the March numbers were “a powerful testament to India’s domestic economic resilience”, adding that broad-based growth across smaller states and island territories pointed to more balanced regional development. However, he flagged a “dual-speed narrative”, noting that strong import GST alongside softer export refunds suggests a widening trade gap. He called for recalibration of the production-linked incentive framework, including a potential “PLI 2.0”, to bolster domestic manufacturing.
Abhishek Jain, indirect tax head and partner at KPMG, said gross GST collections continued to record steady annual growth of about 9 per cent, supported by robust import activity and sustained compliance. Export refunds, while moderating in March, remained healthy for the year overall.
M S Mani, partner at Deloitte India, said consumption sentiment remained firm but noted that overall GST growth was significantly supported by strong import-related revenues, which also likely boosted Customs duty collections. He added that since the data reflects economic activity in February 2026, it does not yet capture the impact of the ongoing war in West Asia.
Underscoring the need for deeper sectoral analysis, he pointed to uneven state-level performance: Maharashtra (17 per cent), Karnataka (14 per cent) and Telangana (19 per cent) recorded robust growth, while Haryana (1 per cent), Andhra Pradesh (1 per cent) and Madhya Pradesh (0 per cent) lagged.
Source: Business Standard
