GST collections rise 11.2% in June, led by strong import revenues

India's net Goods and Services Tax (GST) collections rose 11.2 per cent year-on-year to Rs1.62 trillion in June, while gross GST collections increased 13.9 per cent to Rs1.95 trillion, driven largely by robust revenues from imports, according to government data released on Wednesday.According to information,the June figures, which reflect economic activity in May, showed a continued divergence between domestic and import-led collections. Gross domestic GST revenue rose 6.5 per cent to Rs1.35 trillion, whereas GST revenue from imports surged 34.6 per cent to Rs60,038 crore.After adjusting for refunds, net domestic GST revenue grew 2.6 per cent to Rs1.17 trillion, while net GST revenue from imports jumped 42.2 per cent to Rs45,370 crore.
GST refunds increased 29.1 per cent year-on-year to Rs32,436 crore, with domestic refunds rising 42.9 per cent and import-related refunds up 15.6 per cent.During the first quarter of FY27 (April–June), gross GST collections rose 8.4 per cent to Rs6.32 trillion, while net collections increased 7.1 per cent to Rs5.40 trillion.Vivek Jalan, Partner at Tax Connect Advisory Services LLP, noted that the June GST figures demonstrate the resilience of domestic consumption and the strength of external trade. He noted that net GST collections grew 11.2 per cent even after GST 2.0 rate reductions and the continued impact of accumulated input tax credit on inventories, indicating that consumption remains robust during the ongoing structural adjustments. He added that the GST Council is expected to address issues related to input tax credit accumulation under the inverted duty structure at its next meeting. Jalan also said the sharp rise in import-related GST revenues reflects strong demand for capital goods and raw materials, supported by GSTAT appeal pre-deposits and enforcement actions.Meanwhile,experts said the sustained growth in GST collections reflects the resilience of the Indian economy, with strong import revenues indicating healthy demand for capital goods and raw materials, while faster refunds continue to improve business liquidity.

(Business Correspondent)