GST collections grew at double-digit rates for the third straight month in August, driven by a 29% jump in revenue from imports and a 9.3% increase from domestic transactions.
Estimated GST collections reached Rs 1,99,853 crore, with over two-thirds originating from domestic sources and Rs 62,604 crore from imports. This surge in import revenue is attributed to the rising costs of commodities like crude oil, fertilizers, and bullion. Simultaneously, increased consumption of white goods and automobiles has helped offset the impact of rate reductions implemented last September.
"These collections are a very reliable barometer of the economy since they cover both goods and services consumption across the country. There does not appear to be any slowdown in economic activity and consumption in India, despite the tariff headwinds and the West Asia situation. Considering the fact that collections have shown a marked increase month-on-month despite the rate reductions in Sept 2025, the GST Council should consider further easing of the input tax credit restrictions, audit rationalisation, and reducing compliance burden. This would enable businesses to perform better in an increasingly competitive and complex operating environment," stated MS Mani, partner at Deloitte India.
The GST Council is scheduled to meet later this month.
"The uptick in exports across electronics, mobile phones, and automotives is a positive validation of the government's manufacturing-focused policy interventions, signalling that India's positioning in global value chains is strengthening. That said, the concurrent rise in imports points to continuing dependence on external sourcing in certain segments, reinforcing the need for a calibrated policy push towards deeper localisation and import substitution in these sectors," commented Saurabh Agrawal, partner at EY India.
In August, refunds increased by nearly 68% to Rs 31,795 crore, resulting in net collections of Rs 1,68,057 crore, an 8.3% rise. However, collections declined in some states, including Manipur (down 38%), Jharkhand (-22%), and Chhattisgarh (-18%). Conversely, Assam (97%), Gujarat (28%), and Mizoram (22%) saw significant growth.
