NEW DELHI, Oct. 2
India’s net Goods and Services Tax revenue rose 18.1 per cent year-on-year to ₹1.77 trillion in September, recording its fastest growth in six months as a sharp increase in tax receipts from imports boosted collections.
The September performance accelerated net GST revenue growth for the July-September quarter to around 14 per cent, compared with about 7 per cent in the June quarter, according to provisional Finance Ministry data.
Net GST collections had increased 15.8 per cent in July before growth moderated to 8.3 per cent in August.
Gross GST collections in September rose 14.7 per cent from a year earlier to ₹2.04 trillion, crossing the ₹2-trillion mark for the third time in six months. Collections had previously reached ₹2.43 trillion in April and ₹2.11 trillion in July.
Domestic economic activity continued to provide a strong base for revenue. Gross domestic GST collections increased 10.1 per cent to ₹1.38 trillion.
After refunds, net domestic GST revenue stood at ₹1.24 trillion, up 13.5 per cent from the corresponding month last year.
The more striking increase, however, came from imports.
Integrated GST collected on imports before refunds surged nearly 26 per cent year-on-year to ₹65,525 crore in September, accounting for roughly one-third of total gross GST collections.
After adjusting for refunds to exporters using imported inputs, net GST revenue from imports increased 30.8 per cent to ₹52,028 crore.
The contribution of imports to GST receipts has been rising steadily.
Before refunds, IGST collections on imports grew by an average 27.4 per cent between April and September. Imports accounted for around a quarter of gross GST revenue in April, compared with about a third in September.
The trend remained visible after refunds. Net import-linked IGST accounted for 29 per cent of total net GST receipts in September, up from 21.7 per cent in April.
Several factors contributed to the increase.
Higher commodity prices following the conflict in West Asia and depreciation of the rupee against the dollar increased the taxable value of imports.
At the same time, capital expenditure in industries including mobile-phone manufacturing, power and defence increased imports of machinery, components and other production inputs.
The sharp rise in import-linked GST therefore does not necessarily point to a single economic trend. It reflects a combination of higher prices, currency movements and demand for imported capital goods and industrial inputs.
Customs revenue has displayed a similar pattern.
Central government customs-duty receipts increased 28 per cent during April-August to ₹1.06 trillion, substantially exceeding the 5 per cent growth projected for FY27 in the Union Budget.
The strength of domestic GST receipts nevertheless suggests that the improvement was not driven entirely by imports.
Uttar Pradesh, Telangana, Gujarat and Karnataka each recorded GST growth of between 16 and 18 per cent in September, indicating relatively broad-based expansion across several large state economies.
Total refunds fell slightly during the month.
GST refunds stood at ₹27,001 crore in September, 3 per cent lower than ₹27,848 crore a year earlier.
Domestic refunds declined 13.5 per cent to ₹13,504 crore, while refunds linked to exports through the ICEGATE system increased 10.2 per cent to ₹13,497 crore.
Exporters can claim refunds for taxes paid on inputs and input services used for exports under applicable GST provisions. Domestic businesses can also claim refunds of unused input tax credits in specified circumstances.
The September numbers strengthen the overall GST performance during the first half of the financial year.
Gross GST revenue during April-September increased 11.6 per cent to ₹12.46 trillion.
Net revenue over the same six-month period rose 10.4 per cent to ₹10.66 trillion.
The latest figures also turn attention towards the composition of India’s import-driven revenue growth.
With import GST expanding considerably faster than domestic collections, economists and tax specialists are watching whether the increase predominantly reflects imports of raw materials, components and capital equipment needed for expanding domestic manufacturing or greater imports of finished products.
That distinction could have implications for industrial policy, including the government’s production-linked incentive programmes.
A sustained rise in imports of machinery and intermediate goods associated with new manufacturing capacity would carry different economic implications from a comparable increase driven primarily by imported finished products.
The GST debate is also beginning to shift beyond tax rates towards administrative reform.
Businesses are increasingly looking for the next stage of GST reform to simplify procedures involving input-tax credits, refunds, compliance requirements and dispute resolution.
September’s numbers nevertheless provide a strong revenue signal.
Net collections have recorded their fastest annual expansion in six months, quarterly growth has doubled from around 7 per cent in April-June to about 14 per cent in July-September, and gross monthly receipts have again crossed ₹2 trillion.
The next few months will show whether that momentum can be sustained and, equally importantly, how much of the growth continues to come from imports rather than domestically generated GST revenue.
