Net GST growth slumps to 3.3% in December, as revenues slow and refunds rise 45%

India's GST receipts growth slows to 3.3% in December, reflecting economic slowdown, with refunds and state variances impacting collections.

India’s gross Goods and Services Tax (GST) receipts increased at the second-slowest pace in 43 months in December, while growth in net GST collections, after adjusting for refunds, slumped to 3.3%, the weakest in financial year 2024-25.

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December’s gross GST inflows, for transactions undertaken in November, were a tad under ₹1.77 lakh crore, hitting a three-month low and reflecting 7.3% growth in comparison to the same month in 2023. Growth has only slumped to these levels twice in over three and a half years: in June 2024, when gross receipts rose 7.3%; and in September 2024, when growth had hit a 40-month low of 6.5%.

Part of the sharper moderation in net collections’ growth vis-à-vis gross receipts, can be explained by a 45.3% uptick in refunds to taxpayers, which touched ₹22,490 crore. Net receipts stood at ₹1,54,366 crore in December.

In November, gross GST receipts were up 8.5%, but net collections had risen at a faster pace of 11.1%. This was linked to an 8.9% drop in refunds, led by a nearly 20% decline in taxes repaid on domestic transactions. By contrast, domestic refunds were up 31% in December, and refunds to exporters were up 64.5%.

Prior to refunds, revenues from domestic transactions were up 8.4% in December, lower than the 9.4% growth seen in November, while revenues from imports grew just 3.9%, slowing from 5.9% in November.

Overall growth in net GST revenues in the first nine months of 2024-25 now stands at 8.6%, with collections of almost ₹14.45 lakh crore, slowing from the 9.2% growth recorded till November. The Centre has penned in an expected growth of 11% in its Budget arithmetic for this year.