July GST collections rise 15.4% to Rs 2.11 lakh crore, driven by imports

New Delhi: Goods and Services Tax (GST) collections rose 15.4% year-on-year to Rs 2,11,205 crore in July, the second-highest monthly figure since the new tax structure was implemented in September last year. This was also the fastest pace of growth since the rationalisation of tax rates, according to official data.

The growth was driven by a 29% jump in integrated GST (IGST) on imports, which reflects transactions from the previous month. The increase has been attributed to higher prices of crude oil and other commodities following the West Asia conflict. In addition, strong economic activity in June — when factory output expanded at its fastest pace in nearly two years — also supported the tax collections.

Central GST collections stood at just under Rs 40,000 crore, up 12.3% from a year earlier, while State GST collections rose 8.7% to nearly Rs 48,000 crore. After accounting for refunds, which increased 13% to almost Rs 30,000 crore, net GST collections rose 15.8% to Rs 1,81,237 crore.

The GST data is widely seen as an advance indicator of economic activity. Experts noted that the latest figures reflect continued resilience in consumption and manufacturing. “The high GST collections tie in very well with the 7.3% increase in industrial production during June. It reflects continued economic resilience despite the challenges in the external environment,” said MS Mani, partner at Deloitte India. “The steady growth in GST collections each month indicates that overall domestic consumption is becoming largely insulated from seasonal variations and external headwinds.”

However, some experts expressed concern over the sustained rise in import-related GST collections. “One cannot ignore the elevated levels of import GST collections, which remain a nagging concern. This points to a persistent gap in domestic manufacturing capability despite the range of successful PLI and Atmanirbhar Bharat interventions rolled out over the past few years. It is likely that the sustained push by policymakers towards localisation of around 100 products (being talked about) over a period of time will help bridge this gap,” said Saurabh Agarwal, partner at EY India.

The government has been using GST collections as a measure of economic health and has repeatedly emphasised the importance of broadening the tax base. The steady performance in recent months has been viewed as a positive signal, though policymakers continue to monitor the impact of global commodity prices and geopolitical developments on domestic revenues.

State-wise, Haryana recorded the highest growth of 28%, followed by Gujarat and Puducherry at 26% each, Karnataka and Goa at 23% each, and Maharashtra at 20%. On the other hand, Chhattisgarh saw a 23% decline, while Jharkhand and Manipur recorded a 20% drop.

Overall, the July data underline the resilience of domestic demand even as external risks persist. The mixed performance across states highlights differing economic conditions, with some states experiencing contraction in GST collections.