GST collections rise 7.5% to Rs1.96 lakh crore in July

India’s gross Goods and Services Tax (GST) collections rose by 7.5% year-on-year to Rs1.96 lakh crore in July 2025, according to data released by the Union Finance Ministry on Friday. This marks a modest improvement in revenue generation, even as net collections remained subdued due to a surge in refunds.After accounting for refunds, the net GST revenue stood at Rs1.69 lakh crore, reflecting only a 1.7% growth over July 2024. GST refunds saw a sharp 66.8% increase, with businesses receiving Rs27,147 crore during the month.
According to analysts, the rise in refunds points to faster and more efficient processing by the government. “This increase in refunds augurs well for businesses as it indicates stability in the online refund processes and quicker refund sanctions,” said MS Mani, Partner at Deloitte India. Saurabh Agarwal, Tax Partner at EY India, noted that the government’s proactive approach shows its intent to address issues like inverted duty structures. “Although a complete rate change may still be in the works, these timely refunds offer immediate relief to domestic industries affected by the tax structure,” Agarwal added.
According to information,the GST revenue from domestic transactions rose 6.7% to Rs1.43 lakh crore, while receipts from imports increased by 9.5% to Rs52,712 crore. July’s total GST mop-up included Rs35,470 crore from Central GST, Rs44,059 crore from State GST, Rs1,03,536 crore from Integrated GST (including Rs51,626 crore from imports), and Rs12,670 crore from cess (including Rs1,086 crore from imports).
Aditi Nayar, Chief Economist at ICRA, stated the growth in gross GST revenue in July was stronger than in the previous month. However, the jump in refunds dampened the growth of net revenues. “Growth of GST on imports outpaced domestic revenues, with the latter being dampened by tepid cess collections,” she noted.Pratik Jain, Partner at Price Waterhouse & Co, said the GST Council may consider measures to boost revenue in the coming months. “With compensation cess going away, the States may also be a bit more concerned about the slowdown in GST collections,” he said.
Among the larger producing and consuming states, growth in state GST revenues remained low—Delhi (2%), Gujarat (3%), Rajasthan (4%), Maharashtra (6%), Karnataka (7%), and Tamil Nadu (8%). However, states like Madhya Pradesh (18%), Andhra Pradesh (14%), West Bengal (12%), Punjab, and Haryana showed relatively higher growth, offering some optimism for state-level revenue trends.

(Business Correspondent)