India’s Goods and Services Tax collections surged by 3.2 per cent to over Rs 1.94 lakh crore in May, reflecting robust domestic demand and expanding industrial capacity, according to recent government data.
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Key Points
- Gross GST collections in May 2026 rose by 3.2 per cent year-on-year to over Rs 1.94 lakh crore, up from Rs 1.88 lakh crore in May 2025.
- The increase was primarily driven by a 26.9 per cent growth in taxable supplies of goods and a 22.2 per cent growth in the services sector, indicating strong domestic demand.
- Integrated GST (IGST) collection from imports saw a 19.1 per cent rise to Rs 59,654 crore, suggesting an expansion in industrial capacity.
- Net GST revenues, after adjusting for refunds, increased by 3.3 per cent to approximately Rs 1.67 lakh crore in May.
- Experts suggest the upcoming GST Council meeting should address inverted duty structures, input service refunds, and consider bringing petroleum products under GST for further reform.
Gross GST collections rose 3.2 per cent to over Rs 1.94 lakh crore in May on higher supplies of goods and services, as well as collection from imports, government data showed on Monday.
Gross GST collection was Rs 1.88 lakh crore in May 2025.
Gross Central GST (CGST) collection from domestic transactions during the reported month stood at Rs 37,397 crore, State GST (SGST) at Rs 45,143 crore and Integrated GST (IGST) at Rs 51,990 crore.
Driving Factors Behind the Growth
Taxable supplies of goods grew 26.9 per cent during the reported period, reflecting higher domestic demand, while the same for the services sector grew 22.2 per cent, demonstrating structural resilience in domestic consumption.
IGST collection from imports rose 19.1 per cent during May to Rs 59,654 crore, signalling expansion in industrial capacity.
Goods and Services Tax (GST) refunds grew 2.6 per cent to Rs 27,281 crore.
After adjusting refunds, net GST revenues in May rose 3.3 per cent to about Rs 1.67 lakh crore.
GST mop-up in April reached an all-time high of Rs 2.43 lakh crore.
Cumulative Performance and Expert Views
On a cumulative basis for the first two months of FY2026-27 (April and May), gross GST collections stand at Rs 4.37 lakh crore compared to Rs 4.11 lakh crore in the corresponding period of FY2025-26, a growth of 6.2 per cent.
“This cumulative year-on-year performance is healthy and in the right direction to achieve the full-year GST revenue target,” sources said.
The government has budgeted to mop up Rs 10.19 lakh crore from GST in the current fiscal.
Commenting on the numbers, Price Waterhouse & Co LLP partner Pratik Jain said collectively for April and May 26, collections show a robust 8.8 per cent year-on-year growth on a like-for-like basis.
This is despite the steep rate cuts from September 2025 and geopolitical disruptions during the last couple of months, he said, adding that imports and domestic consumption of products and services have expanded significantly, which shows economic resilience.
Given the increase in input costs due to supply chain issues, this might be the right time for the government to consider providing working capital support to industry by relaxing refund provisions with respect to input GST, which has been accumulating for many businesses, he added.
Challenges and Future Reforms
“While import GST has recorded a near 20 per cent growth, this may also be attributed to rupee depreciation. Adjusted for the one-time telecom payment in the base, domestic collections reflect moderate growth in line with prevailing economic conditions,” KPMG Indirect Tax Head & Partner Abhishek Jain 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, Mahesh Jaising, Partner & Indirect Tax Leader, Deloitte India said.
With the GST Council meeting on the anvil, trade is hopeful of measures to support ease of doing business and further unlock working capital, Jaising added.
The upcoming GST Council meeting must address deepened inverted duty structures, particularly refunds on input services, which continue to distort competitiveness, said Vivek Jalan, Partner, Tax Connect Advisory Services LLP.
“Bringing petroleum products under GST would be a landmark reform to rationalise tax incidence and reduce cascading effects. Equally important is easing the refund process with clear, transparent guidelines, especially around tagging certain taxpayers as risky, so that genuine businesses are not burdened by delays,” he added.
high of Rs 2.43 lakh crore.
