The Goods and Services Tax (GST) has been a cornerstone of fiscal reform in India. The shift to GST aimed to dismantle the complex, multilayered national tax structure and replace it with a more transparent, technology-driven, and efficient system.
As a significant indicator of economic activity and compliance, GST revenue collections not only reflect the health of the economy but also the effectiveness of the tax system in enhancing the ease of doing business.
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Below is a detailed analysis of GST revenue collections that provides valuable perspectives on the tax system"s impact on different sectors and regions.
What is GST in India?
GST, i.e., Goods and Services Tax in India, is a multi-stage, comprehensive, destination-based monetary tax levied on every value-addition practice in the supply chain. It was implemented on July 1, 2017, under the Finance Ministry of India, aiming to make the country a unified common market. Here are some key highlights of GST:
GST is levied at each production and distribution stage, allowing input tax credits to offset previous payments. Ultimately, consumers bear the tax embedded in the final prices of goods and services.
GST rates range from 0 percent to 28 percent, depending on item necessity, ensuring affordability for essential goods. Special schemes like the composition scheme simplify compliance for small businesses by allowing fixed turnover rate payments.
GST offers exemptions for certain businesses, such as education and healthcare. It"s a destination-based tax, collecting revenues in the consuming state and promoting equity across states by aligning tax collection with consumption locations.
In June 2025, gross GST revenue collections stood at Rs2.36 lakh crore, marking 12.6 percent year-over-year growth. The total net GST revenue for June 2025 was Rs2.09 lakh crore, a significant 9.1 percent increase from Rs1.9 lakh crore in June 2025.
GST revenue collections of June 2025 vs GST revenue collections of June 2024
