GST Growth Slows To Five-Year Low Of 5.57% In FY26

India’s gross Goods and Services Tax (GST) collections, adjusted to include compensation cess for comparison purposes, rose 5.57% year-on-year to ₹23.32 lakh crore in FY26, marking the slowest growth in five years, according to government data released on May 3.

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The adjusted GST collections stood at ₹22.09 lakh crore in FY25. The latest growth rate is the weakest since FY21, when indirect tax collections had contracted 7%.

Official headline GST collections, excluding cess, increased 8.3% year-on-year to ₹22.27 lakh crore in FY26 from ₹20.56 lakh crore in the previous financial year.

Import Revenue Growth Outpaces Domestic Collections

Data showed that import-linked GST revenues continued to grow faster than domestic collections during FY26. Integrated GST (IGST) collected on imports rose 14.1% year-on-year to ₹5.95 lakh crore. Overall import-related GST revenues, including cess, increased 12.8% to ₹6.01 lakh crore during the financial year.

In comparison, domestic gross GST revenue rose 6.4% to ₹16.32 lakh crore. After including cess adjustments, domestic revenue growth stood at 3.27%. Within domestic collections, Central GST (CGST) rose 7.3% to ₹4.44 lakh crore, while State GST (SGST) increased 6.6% to ₹5.51 lakh crore. Domestic IGST collections grew 5.4% during FY26.

Once the cess became defunct from February 1, 2026 onwards, there was a start of a separate calculation for the compensation cess from November 2025.

GST Refund Increases in FY26

The level of GST refunds increased in FY26, affecting the revenues growth. GST refunds not including cess went up by 17.8% to ₹2.92 lakh crore. Domestic transaction refunds increased 23.8% to ₹1.64 lakh crore, while import refunds rose 10.9% to ₹1.28 lakh crore.

After adjusting refunds and cess, net GST revenue rose 4% year-on-year to ₹20.3 lakh crore in FY26. Net GST collections excluding cess increased 7.1% to ₹19.35 lakh crore during the financial year.

Compensation cess collections declined 33.3% to ₹99,039 crore in FY26 compared with ₹1.49 lakh crore recorded in FY25.

April GST Collections Hit Record High

Gross GST collections in April 2026 rose 8.7% year-on-year to a record ₹2.42 lakh crore, compared with ₹2 lakh crore collected in March, according to official data. Net GST collections for April stood at ₹2.11 lakh crore, up 7.3% year-on-year.

State-Wise GST Growth Remains Uneven

The state that witnessed the highest post-settlement SGST growth was Haryana at 22%. The top performer by absolute amount was Maharashtra, which witnessed an SGST collection rise of 13% to ₹1.95 lakh crore. Growth rates for Gujarat and Karnataka stood at 10% and 5%, respectively, while that of Tamil Nadu was at 3%.

Several states recorded declines in SGST collections. Jharkhand reported a 12% decline, Chhattisgarh fell 14%, Odisha declined 9%, and Jammu and Kashmir recorded an 8% fall.

Government data showed that 12 states reported negative GST growth during FY26, while 16 states recorded only single-digit growth, reflecting uneven collection trends across regions and sectors