New Delhi: India's Goods and Services Tax (GST) collections reached an all-time high of Rs 2,42,702 crore in April, marking an 8.7% increase compared to the same period last year. However, this growth was largely driven by a sharp 26% surge in revenue from imports, which contributed an estimated Rs 57,580 crore to the total mop-up.
Domestic collections show slower growth
Based on transactions recorded in March, for which taxes were paid in April, official data reveals that GST collections from domestic transactions stood at Rs 1,85,122 crore, reflecting a modest 4.3% increase over April 2025. Within this segment, state GST collections rose 3.1% to Rs 61,331 crore, while central GST collections grew by over 7% to Rs 52,140 crore. The slower growth in domestic collections is attributed to reduced tax rates on several goods and services, which have dampened overall collection growth.
Impact of geopolitical tensions and supply chain disruptions
The muted growth in domestic collections may also be linked to disruptions caused by the West Asia conflict, which led to supply chain problems for many industries, particularly those reliant on gas. The gas shortage forced several fertiliser units to advance their maintenance schedules, while manufacturing units in Morbi and other regions had to halt production. Additionally, shortages of petrochemicals and other raw materials have likely contributed to slower industrial output growth in March.
In contrast, higher commodity prices have boosted collections from imports, offsetting the domestic slowdown. Experts point to a divergence between domestic and import-linked GST growth as a key concern.
Expert insights on consumption trends
Pratik Jain, partner at consulting firm Price Waterhouse & Co, noted that the slower growth in domestic collections could indicate a softening in consumption, possibly reflecting a moderation in discretionary spending amid ongoing geopolitical uncertainties. Saurabh Agrawal, tax partner at EY India, commented, “While the headline numbers are encouraging, the divergence between modest domestic GST growth and the significant uptick in import-linked collections warrants a strategic pivot. In an increasingly dynamic global landscape, we must critically re-examine our policy frameworks to further incentivise domestic manufacturing.”
Refunds and net collections
In April, refunds rose by over 19% to Rs 31,793 crore, resulting in net GST collections growing 7.3% to Rs 2.1 lakh crore. MS Mani, partner at Deloitte India, highlighted that although these collections relate to transactions in March 2026—a period of normal year-end reporting with maximum transactions—several large manufacturing and consuming states reported low single-digit state GST collection growth. This includes Gujarat at 3%, and Maharashtra, Karnataka, and Haryana at 5%, which he said requires deeper sectoral analysis.
