India's tax revenue story just got more exciting this month. The Ministry of Finance announced that GST collections have crossed the Rs 2 lakh crore milestone for the second consecutive month. This achievement signals sustained economic momentum across multiple sectors and regions.
May 2025 witnessed Rs 2.01 lakh crore in total collections, representing a robust 16.4% increase compared to the previous year. These figures follow April's record performance and suggest that businesses are experiencing genuine growth rather than seasonal fluctuations.
The Rs 2.01 lakh crore figure tells an interesting story when examined closely. Domestic transactions contributed the largest share at Rs 1.50 lakh crore. This segment recorded 13.7% growth, indicating healthy internal economic activity. Import-based GST revenue performed even better with 25.2% growth, reaching Rs 51,266 crore.
Central GST collections stood at Rs 35,434 crore while State GST reached Rs 43,902 crore. Integrated GST contributed approximately Rs 1.09 lakh crore to the total pool. Cess collections added another Rs 12,879 crore to government coffers. These numbers suggest balanced growth across different tax categories.
Refunds decreased by 4% to Rs 27,210 crore during May. Net India GST collection reached Rs 1.74 lakh crore after accounting for refunds. This represents a significant 20.4% increase over the previous year period.
Different states experienced varying levels of Tax Collections India growth during May. Maharashtra, West Bengal, Karnataka, and Tamil Nadu emerged as top performers with growth rates between 17% and 25%. These states traditionally drive industrial and service sector activities.
Gujarat, Andhra Pradesh, and Telangana showed more modest increases up to 6%. States like Madhya Pradesh, Haryana, Punjab, and Rajasthan demonstrated moderate growth around 10%. These variations reflect diverse economic conditions and sectoral concentrations across regions.
Tax professionals view these GST collection figures optimistically. Abhishek Jain from KPMG emphasized that consistent performance above Rs 2 lakh crore indicates genuine economic momentum. The 16% year-on-year growth suggests recovery is taking firm hold across sectors.
Deloitte's M S Mani pointed out significant state-wise differences in collection growth. He stressed the need for detailed sector-wise analysis to understand regional variations. These insights help policymakers identify areas requiring focused attention.
The government also expects, given the GST collection of the country, the most significant expansion in all-India economic growth as per budget estimates by 11%. The target is to achieve an amount of approximately Rs. 11.78 lakh crore, including Central Goods and Services Tax (CGST) and the compensation cess component. The ambitious projections provided for the current financial year are well-supported by the performance trends through the year.
Continuous growth signals a rise in investment, which consequently leads to more businesses operating in any given geographical area and hence improving the ease of doing business in India. Consumer expenditure trends so far confirm this trend, saying the direction remains up. And in the Indian context, those who can afford more consume more, which does not occur at any point.