Gross goods and services tax (GST) collections grew 3.2% year-on-year to Rs 1.94 lakh crore in May (April transactions) on a relatively strong base, signalling economic resilience despite the external shock from the West Asia war. Sequentially, collections contracted by 20.16% from an all-time high mop-up of Rs 2.43 lakh crore in April, which resulted from year-end tax settlements by businesses.
Excluding a one-time GST payment of Rs 10,000 crore in May last year on account of spectrum allocation, gross GST revenue grew 9% in May with domestic gross GST growth being 5%, the Finance Ministry said in a statement.
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May GST receipts are the lowest in three months
Net GST revenue (after refunds) grew 3.3% to Rs 1.66 lakh crore in May, as refunds rose 2.6% to Rs 27,281 crore, driven largely by the import segment. Experts said modest growth in refunds reflects a continued focus on timely credit flow to businesses, providing much needed impetus.
The gross collection in May comprises Central GST (CGST) of Rs 37,397 crore, State GST (SGST) of Rs 45,143 crore, and Integrated GST (IGST) of Rs 51,990 lakh crore. The gross domestic revenue stood at Rs 1.34 lakh crore, recording a contraction of 2.6%.
Gross GST revenue from imports stood at Rs 59,654 crore, up 19.1%, reflecting resilience in trade flows despite ongoing global uncertainties and West Asia related geopolitical headwinds. Government sources said the bulk of import growth is driven by raw materials and intermediate inputs that feed India’s industrial production chain. A granular review of the data confirms that the surge is driven overwhelmingly by industrial raw materials and energy inputs, government sources said.
Mahesh Jaising, Partner & Indirect Tax Leader, Deloitte India, said the relatively softer domestic performance in May also needs to be seen in the context of the strong April base; however, GST 2.0 led rate rationalisation and simplification measures appear to be supporting underlying consumption and demand without materially diluting revenues. The sources also stated that the taxable supply data for goods sectors in April (reported in the returns for May) shows strong and broad-based growth of 26.9% year-on-year to Rs 40.10 lakh crore. This growth is not concentrated in any single segment but spans agriculture, manufacturing, chemicals, metals, electronics, and consumer goods simultaneously.
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Rate Rationalization
“The domestic economy is therefore experiencing genuine demand expansion, which was the intent of the GST rate rationalisation carried out in September last year,” sources said.
The government had announced GST rate cuts on 375 items, including essentials, electronics, and automobiles, on September 3, with the changes taking effect from September 22, the first day of Navratri. Following the rate rationalisation, the GST compensation cess ceased to exist effective February 1, and new rates of excise duty on tobacco products and health and national security cess on pan masala came into effect.
Manoj Mishra, Partner and Tax Controversy Management Leader, Grant Thornton Bharat, said collections have remained close to the Rs 2 lakh crore mark even without any extraordinary revenue support this year, underscoring the growing maturity and stability of GST regime.
Ikesh Nagpal, Lead- AKM Global, said that despite rising geopolitical tensions in West Asia and concerns around energy prices and global trade, May 2026 GST collections remained close to the Rs 2 lakh crore mark, highlighting the resilience of domestic economic activity. “Import GST collections grew over 19%, reflecting strong trade activity, although part of the increase may be attributable to higher crude prices, supply-chain disruptions arising from the Iran conflict, and a stronger US dollar,” Nagpal said.
TOPICSGSTThis article was first uploaded on June one, twenty twenty-six, at fifty-eight minutes past six in the evening. © The Indian Express (P) Ltd