GST Collections Rise 3.2% In May As Goods, Services Activity Remains Strong

India’s Goods and Services Tax (GST) collections recorded a slower pace of growth in May 2026, with net revenue rising 3.2% year-on-year to ₹1.67 lakh crore after refunds. Gross GST collections stood at ₹1.94 lakh crore during the month, lower than the record ₹2.42 lakh crore collected in April.

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Refunds issued during May increased 2.6% from a year earlier to ₹27,281 crore. Despite the moderation in headline revenue growth, official data indicated continued strength in economic activity across both goods and services sectors.

High Base Effect Affects Growth Rate 

Lower growth rate partly influenced by higher base from previous year. The GST collections in May 2025 had included a one-time payment of nearly ₹10,000 crore by a telecom operator related to spectrum allocation, which had boosted domestic tax receipts.

In the absence of a similar payment this year, the year-on-year comparison reflected a softer growth rate. Officials said the headline figure did not fully capture the underlying trend in tax collections.

GST revenues reported in May largely correspond to economic transactions undertaken in April, a period during which consumption and business activity remained healthy.

Goods Sector Shows Broad-Based Expansion

Data on taxable supplies highlighted strong momentum in the goods segment. Taxable supplies from goods rose 26.9% year-on-year to ₹40.1 lakh crore in April, compared with ₹31.61 lakh crore in the corresponding period last year.

All 27 commodity groups recorded positive growth during the month. The surge occurred in various industries such as farming, production, chemical, metal, electronic, and consumer goods. The broad increase in taxable business helped GST collection. The rise in taxable income supported the tax collection despite the slowdown in revenue growth.

Services Activity Remains Resilient

The services sector also reported healthy growth. Taxable supplies increased 22.2% year-on-year to more than ₹11.5 lakh crore in April.

Major service categories registered positive growth during the period. Real estate, construction, transportation and telecommunications emerged among the key contributors to the increase in taxable supplies.
The performance of the services sector added support to the overall tax base and reflected continued activity across investment- and consumption-linked segments.

Import-Linked Collections Strengthen

Integrated GST (IGST) collections on imports rose 20.2% year-on-year to ₹60,166 crore in May from ₹50,070 crore a year earlier.

The increase primarily to higher imports of industrial raw materials, intermediate goods and energy products. The trend points to continued manufacturing activity and demand for production inputs.

After adjusting for refunds and the elevated base effect, officials said net GST collections grew 10.1% year-on-year. They also noted that faster refund processing and increased automation have helped improve liquidity for exporters and manufacturers while supporting revenue collections.

The most recent data on the GST comes after a period when the collection numbers were rather volatile, with the GST collection falling sharply in November 2025 due to rationalisation of the rates and reduction in cess collections. Even after moderating in May, tax figures showed economic activity.