CURRENT NEWS
GST collection nearly doubles in 5 years
WHAT?
India’s Goods and Services Tax (GST) collection nearly doubled over five years, reaching an all-time high of ₹22.08 lakh crore in FY25. This marks eight years since GST’s introduction on July 1, 2017, reflecting significant growth in the tax regime.
Key Details
- Growth Trajectory: GST collections rose from ₹11.37 lakh crore in FY21 to ₹22.08 lakh crore in FY25, a year-on-year increase of 9.4%. The average monthly collection increased from ₹1.51 lakh crore in FY22 to ₹1.84 lakh crore in FY25.
- Tax Base Expansion: The number of registered taxpayers grew from 65 lakh in 2017 to over 1.51 crore, broadening the tax net and improving compliance.
- Economic Indicators: Monthly collections hit a record ₹2.37 lakh crore in April 2025 and ₹2.01 lakh crore in May 2025, signaling robust consumption and economic activity. Experts like Mahesh Jaising from Deloitte India attribute this to a simplified tax structure and enhanced compliance.
- Policy Impact: GST consolidated 17 local taxes and 13 cesses into a five-tier structure, reducing complexity. There is also a push to include petroleum products like Aviation Turbine Fuel (ATF) under GST to address cascading effects.
Implications
- Revenue Boost: The near-doubling of collections supports government spending on infrastructure and social programs, aligning with the 2025-26 Budget’s focus on economic growth.
- Economic Formalization: Higher collections reflect a shift toward organized business, benefiting states like Maharashtra and Gujarat, which lead in GST contributions.
- Challenges: Sustaining growth depends on plugging leakages and addressing regional disparities, with some states still lagging in compliance.
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