June GST collections at Rs 1.95 lakh crore, import revenue jumps 35%

In May, GST from imports had made up 30.7% of total collections, with government sources arguing then that the rise in Integrated GST revenue from imports was a sign of “industrial capacity expansion”. Officials had said the 19.1% rise in GST from imports in May was driven by inbound shipments of raw materials and intermediate inputs that feed India’s industrial production chain – items such as processing units, memory chips, copper, and aluminium scrap.

However, a significant increase in the IGST of these items was also likely due to a rapid increase in prices of memory chips, copper, and aluminium.

According to Abhishek Jain, Indirect Tax Head & Partner at KPMG, the “exceptional growth” in GST collections from imports “could to some extent be on account of rupee depreciation”. Jain added that the overall growth “clearly demonstrates strong resilience by the Indian economy amidst geopolitical uncertainties”.

Meanwhile, Ikesh Nagpal, Lead-Indirect Tax at tax and consulting firm AKM Global said it was “encouraging” that the growth in GST collections was alongside a 29.1% increase in refunds. This, according to Nagpal, indicated that “strong revenue growth is being achieved without affecting liquidity for businesses”.

Total refunds in June rose to Rs 32,436 crore, resulting in net GST revenue being 11.2% higher at Rs 1.62 lakh crore. Net domestic revenue was only 2.6% higher from last year at Rs 1.17 lakh crore, while net revenue from imports was 42.2% higher at Rs 45,370 crore.

The data for June came on the same day the GST began its 10th year of existence, having been rolled out on July 1, 2017. The new indirect tax regime continues to be fine-tuned, with the GST Council last year in September approving a raft of changes, including lower tax rates and a two-slab structure, among others.

Experts continue to expect more reforms in the GST system, with BDO India’s Karthik Mani, Partner & Leader (South) – Indirect Tax, saying that industry and taxpayers want a single pan-India GST registration “to end the compliance burden of state-wise registrations”. Other changes on the wish-list include a “genuine amnesty” for routine reconciliation mismatches so taxpayers are not dragged into litigation over minor notices, auto-populated monthly returns to reduce manual filing to near-zero, and fungibility of Input Tax Credit across states. “Achieving these would mark GST’s true transition from a tax reform to a genuinely frictionless, taxpayer-first system,” Mani said.