GST collection rises 6.5% to ₹1.86 lakh crore in August

Gross collections from Goods & Services in August grew at 6.5 per cent in August and crossed ₹1.86 lakh crore, Finance Ministry reported on Monday. However, with refunds turning negative mainly on account of the tariff impact, net collections saw a growth of 10.7 per cent and reached around ₹1.67 lakh crore.

GST collections in August is related to goods consumed and services availed in July.

According to latest data, gross domestic revenue was around ₹1.37 lakh crore, which is 9.6 per cent higher than around ₹1.25 lakh crore of August last year. During this period, collection from import declined to over ₹49300 crore from around ₹50000 crore. 

“While CGST and SGST recorded a double-digit expansion, the growth in IGST and cess collections was tepid, dampening the headline GST increase to 6.5 per cent,” said Aditi Nayar, Chief Economist with ICRA. Further, low inflation readings for the WPI and the CPI may partly be dampening the GST growth. The contraction in IGST on imports is puzzling in light of the sharp increase in merchandise imports in July 2025 (that would have reflected in the August 2025 GST data),” she said.

Manoj Mishra, Partner at Grant Thornton Bharat LLP said that August’s GST collections data highlights a familiar trend as a few large states continue to anchor national collections, with Maharashtra, Karnataka, Tamil Nadu and Gujarat together accounting for over a third of the gross collection. 

“The nearly 11 per cent growth in net revenues was aided by strong domestic demand and leaner refunds,” he said.

In August, this year, domestic refund declined by over 21 per cent, while that to exporters came down to around 18 per cent. 

According to Saurabh Agarwal, Tax Partner at EY India, the significant dip in export refunds is a clear signal of the impact that global tariffs are having on our export sector. 

“The Government’s steps to build relations with other developing economies would likely help in addressing these external challenges to ensure our exporters remain competitive on the world stage,” he said.

All eyes are now on GST rate ratioanalisation and implementation of the recommendations of the Group of Ministers. Agarwal said it is crucial that the proposed rate rationalization is implemented swiftly. 

“Any delay could lead to a ‘wait-and-watch’ approach from consumers, potentially dampening collections in the coming months. A timely and decisive policy action will be key to sustaining our current momentum,” he said.

Adding to this, Mishra said that the proposed GST rate cuts will likely lift consumption in the festive quarter, though without careful calibration they may narrow state revenues and create settlement pressures. 

“Sustained buoyancy will depend less on headline rate tweaks and more on widening the tax base, faster refunds, and ensuring predictable revenue flows for states,” he concluded.