India has achieved a remarkable milestone in its fiscal journey as the Goods and Services Tax (GST) collection for the financial year 2024-25 (FY25) soared to a record ₹22.08 lakh crore (US$ 257 billion). This represents a 9.4% year-on-year (YoY) growth, reinforcing the country’s strong economic momentum and the efficiency of its indirect tax system. This achievement underscores the government’s robust compliance measures, technological advancements, and broadening taxpayer base.

In FY25, the average monthly GST collection stood at a formidable ₹1.84 lakh crore (US$ 21.44 billion), significantly higher than the average of ₹95,000 crore in FY21. This consistent rise reflects a healthy economic environment, increased digitization, and a well-enforced tax structure.

Consistent GST Growth Over the Years

India's journey with the GST regime has been one of consistent growth and refinement. In FY21, the total GST collection was ₹11.37 lakh crore (US$ 132.5 billion). Since then, the collections have shown strong upward momentum:

• FY22: ₹14.83 lakh crore (US$ 172.82 billion)

• FY23: ₹18.08 lakh crore (US$ 210 billion)

• FY24: ₹20.18 lakh crore (US$ 235 billion)

• FY25: ₹22.08 lakh crore (US$ 257 billion)

Over a span of just five years, India has doubled its GST revenue, signaling the maturing of its indirect tax ecosystem. The key drivers of this growth include policy stability, improved compliance, efficient data tracking via e-invoicing, and better integration between GSTN, Income Tax Department, and Customs.

May 2025: A Strong Performance

In May 2025, India reported GST collections of ₹2.01 lakh crore (US$ 23.42 billion) — a 16.4% jump from the same month last year. The breakdown reveals insightful trends:

• Domestic transactions contributed ₹1.5 lakh crore (US$ 17.48 billion), up 13.7% YoY.

• Imports added ₹51,266 crore (US$ 5.97 billion), growing 25.2% YoY.

This data highlights the growing contribution from both internal consumption and global trade, suggesting that India is well-placed within the global supply chain ecosystem.

Segment-wise GST Breakdown

The structure of GST collections for May 2025 showcases the balanced revenue sharing among the Centre and the States, along with the unified tax on inter-state transactions:

• Central GST (CGST): ₹35,434 crore (US$ 4.13 billion)

• State GST (SGST): ₹43,902 crore (US$ 5.12 billion)

• Integrated GST (IGST): ₹1.09 lakh crore (US$ 12.70 billion)

This balance ensures cooperative federalism, a key aspect of India's fiscal design, and strengthens both Union and State governments’ spending capacity.

However, it’s noteworthy that GST refunds saw a slight decline in May, dropping 4% to ₹27,210 crore (US$ 3.17 billion). This marginal dip could be attributed to processing timeframes or lower claim submissions by businesses.

Expanding Taxpayer Base

As of April 30, 2025, India had over 1.51 crore active GST registrations, comprising:

• 1.32 crore normal taxpayers

• 14.86 lakh composition taxpayers

• 3.71 lakh Tax Deducted at Source (TDS) accounts

This indicates a widening tax base, suggesting more businesses are entering the formal economy. The continued growth in registrations reflects increased trust in the tax system and greater ease of compliance.

Structural and Policy Enhancements

The rise in GST revenue and taxpayer participation can be credited to several structural reforms:

• Implementation of e-invoicing across broader business segments

• Mandatory e-way bill generation ensuring better movement tracking

• Integration of AI tools for fraud detection and compliance monitoring

• Encouragement of digital payments and discouragement of cash-based transactions

• Introduction of faceless assessment to reduce red tape and promote transparency

These enhancements have made GST more predictable, transparent, and easy to follow, especially for MSMEs and start-ups.

GST’s Role in Economic Growth

A healthy GST collection is not just a fiscal indicator, but also a barometer of economic activity. With increasing collections from both domestic transactions and imports, India’s consumption and production cycle appears vibrant. The numbers also reaffirm strong supply chain performance and suggest growing purchasing power across sectors.

The strong performance in FY25 indicates that India’s macroeconomic fundamentals are stable, with controlled inflation, strong consumer sentiment, and robust infrastructure investment driving production and services.

Future Outlook

With continued reforms and a stable tax ecosystem, GST revenue is expected to continue its upward trajectory in the coming years. Policy think tanks and government officials are exploring:

• Rationalization of GST rates to simplify compliance

• Expansion of GST to include more petroleum products and electricity

• Improved dispute resolution mechanisms and faster refund cycles

• Use of blockchain and AI to increase transparency and traceability

If these initiatives materialize, the next phase of GST evolution will not just enhance revenue but will also position India as a model for indirect taxation globally.

Conclusion

The record ₹22.08 lakh crore GST collection in FY25 is a significant achievement for India, representing not just numbers but also the strength of its fiscal architecture. With consistent year-on-year growth, robust monthly averages, and a growing taxpayer base, India’s GST regime is clearly becoming more resilient, transparent, and effective.

From ₹11.37 lakh crore in FY21 to ₹22.08 lakh crore in FY25, the journey showcases India’s transformation into a more digitally compliant and economically dynamic nation. The government’s focus on policy clarity, digital monitoring, and systemic simplification is evidently paying dividends.

As India continues on its path to become a US$ 5 trillion economy, the GST system will remain a key pillar of revenue and compliance, guiding the nation toward fiscal strength and inclusive development.

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