Andhra Pradesh has demonstrated remarkable economic resilience, posting a robust 5.78% growth in its net Goods and Services Tax (GST) collections for December 2025. This performance comes despite significant tax rate reductions and structural changes implemented under the GST 2.0 framework.
Record-Breaking Collections Amidst Rate Rationalisation
The state's net GST revenue for December 2025 stood at ₹2,652 crore, which is the highest-ever collection for the month of December since the GST regime was introduced in 2017. These figures correspond to business transactions undertaken in November 2025. The achievement is particularly significant as it follows sweeping tax reforms, including rate cuts on several consumer essentials, durables, pharmaceuticals, and cement. Furthermore, GST on life and medical insurance was removed from September 22, and the GST compensation cess was withdrawn on all items except tobacco and its products.
Compared to December 2024, when net collections were ₹2,507 crore, the state's 5.78% rise marginally outperformed the national average growth of 5.61% (excluding imports). Among southern states, Andhra Pradesh secured the second position after Tamil Nadu, and surpassed the performance of Karnataka, Kerala, and Telangana, indicating a stronger growth momentum.
Government Strategy and Sectoral Performance
Chief Commissioner of State Taxes, Babu A, attributed the sustained growth to the government's effective compliance and enforcement strategy. He stated that improved compliance, targeted analytics-based audits, and timely Integrated GST (IGST) settlements helped offset the impact of the rate cuts. The focus remained on plugging revenue leakages and expanding the tax base rather than on short-term revenue extraction.
While gross GST collections for December 2025 were ₹3,137 crore, showing a year-on-year decline due to lower rates and cess withdrawal, officials clarified that the fall was minimal when adjusted for cess collections. Excluding cess, the decline in gross collections was negligible, pointing to a stabilisation phase post-reforms.
Sector-wise data revealed a strong turnover growth of 23.69% in key segments like automotive, cement, and electronics, signalling heightened business activity and consumption. However, the overall GST liability for businesses declined due to rate rationalisation and increased utilisation of input tax credit, which sharply reduced their cash payments for GST.
Broader Fiscal Picture and Future Trajectory
IGST settlement emerged as a major pillar of support, rising 8.29% year-on-year to ₹1,549 crore. This growth was aided by stricter scrutiny of ineligible Input Tax Credit (ITC) claims and subsequent reversals. Beyond GST, other tax streams also showed positive trends: Petroleum VAT collections increased by 3.89% to ₹1,448 crore, and professional tax surged by an impressive 38.32% to ₹42 crore, reflecting an expanding taxpayer base in the state.
Cumulatively, total collections across all major taxes from April to December 2025 grew by 4.53%, successfully reversing the slowdown observed in the first quarter of the fiscal year. For December alone, total tax collections reached ₹4,246 crore, a 4.91% increase from ₹4,047 crore in December 2024.
Chief Commissioner Babu concluded that the consistent improvement, achieved on a modest base, positions Andhra Pradesh favourably at both regional and national levels. He indicated that this performance signals a stabilising upward fiscal trajectory for the state in the coming quarters.
