Bouncing back: April's net GST kitty at fresh high of Rs. 2,09,000 crore (US$ 24.95 billion)

India's net goods and services tax (GST) receipts significantly increased in April, reaching a fresh monthly record of over Rs. 2,09,000 crore (US$ 24.95 billion). This represents a 9.1% growth compared to the previous month despite a 40% sequential refund surge. Based on transactions done in March, April's gross GST revenues rose 12.6% to nearly Rs. 2,37,000 crore (US$ 28.29 billion). Domestic transaction collections increased by 10.7%, while import revenues saw a sharper rise of 20.8%. Business Standard calculations indicate that net GST revenues from transactions in FY25 grew by over 8%, with gross receipts rising by 9.5%. Total net revenues from economic activity in FY25 reached over Rs. 19,73,000 crore (US$ 235.53 billion), up from Rs. 18,26,000 crore (US$ 217.98 billion) in the previous year. Refunds for domestic transactions grew 22.4%, while GST refunds to exporters increased 86.1% to nearly Rs. 14,000 crore (US$ 1.67 billion). The rise in import refunds, at 20%, is attributed to increased exports of finished goods containing imported inputs. The government refunds GST levies on imported inputs used in exports, suggesting a positive influence of substantial exports to the US market before the announcement of reciprocal tariffs.

The strong GST collections in April indicate a robust economic performance in the last month of FY25. Union Minister of Finance and Corporate Affairs, Ms. Nirmala Sitharaman, highlighted the resilience of the Indian economy and the effectiveness of cooperative federalism, expressing gratitude to taxpayers and state GST authorities. While a potential moderation in absolute GST collections is anticipated in the next six months due to the global economic climate, the overall outlook for the Indian economy remains optimistic. Emerging manufacturing opportunities drive this positive sentiment as businesses seek to establish alternative supply chains globally to mitigate future tariff-related disruptions. The record GST collections also reflect ongoing recovery and growth, with a significant contributor being the year-end reconciliation process, which typically results in additional tax payments by businesses to align their returns.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.