GST Collections Hit Rs.1.85 Lakh Crore in June, Growth Slows to 6.1% — Lowest in Four Years

India’s Goods and Services Tax (GST) collections for June 2025 rose to ₹1.85 lakh crore, marking a 6.1% year-on-year increase—its slowest pace in four years. Despite remaining above the ₹1.8 lakh crore threshold for the third consecutive month, the figure marks a noticeable deceleration from May’s ₹2.01 lakh crore and April’s record ₹2.37 lakh crore. The latest data, released by the Ministry of Finance on July 1, coincides with GST’s eighth anniversary, a regime that has doubled its revenue since inception in 2017-18. The moderation in June collections suggests a potential cooling in consumption patterns or tax buoyancy, despite strong headline economic indicators.

Highlights

• GST collections for June rose 6.1% YoY to ₹1.85 lakh crore.

• Growth rate is slowest since FY22, despite consistent high-value inflows.

• GST has doubled since 2017-18, now reaching ₹22.1 lakh crore in FY25.

• June marks the third month of GST staying above the ₹1.8 lakh crore mark.

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April and May Set High Benchmark; June Lags in Monthly Growth Momentum

April 2025 marked a historic peak for India’s indirect tax framework with GST collections hitting ₹2.37 lakh crore—the highest ever since its rollout in July 2017. May followed with ₹2.01 lakh crore, supported by a robust 16% year-on-year growth, the fastest in 31 months. This surge was buoyed by year-end compliance, better enforcement through e-invoicing, and increasing formalisation. However, June’s relative dip in momentum may reflect a return to seasonal norms, coupled with a tapering in consumption-led tax flows. Analysts also point out that the fiscal quarter-end phenomenon, which typically boosts April figures, was absent in June, leading to lower tax mop-up.

Highlights

• April posted record-high GST collections of ₹2.37 lakh crore.

• May saw strong 16% YoY growth at ₹2.01 lakh crore.

• June’s moderation may be seasonal or tied to slower consumer demand.

• Year-end tax compliance and e-invoicing helped boost earlier collections.

Manufacturing and Exports Rise Even as Industrial Output Stays Subdued

While GST revenue showed signs of softening, macroeconomic data suggested a mixed economic outlook. The HSBC Manufacturing Purchasing Managers’ Index (PMI) climbed to a 14-month high in June, reflecting increased factory output and strong demand, particularly from overseas. Export orders reached one of their highest levels since 2005, underscoring external resilience. Yet, India’s Index of Industrial Production (IIP) for April-May 2025 recorded sluggish growth at just 1.8%, compared to 5.7% in the same period last year. The divergence between buoyant manufacturing sentiment and subdued industrial performance complicates short-term revenue forecasting, especially for indirect taxes like GST that are closely tied to consumption and production.

Highlights

• HSBC PMI hit 14-month high in June, signalling robust manufacturing growth.

• Export demand strong, scaling highest levels since 2005.

• Industrial output (IIP) grew just 1.8% in April-May vs 5.7% YoY.

• Mixed indicators point to uneven economic traction impacting GST buoyancy.