Separately, high-frequency monthly data also showed strong economic momentum in May. Unified Payments Interface transactions rose 33% year-on-year in the month to 17.8 billion transactions. Mahindra & Mahindra, the country’s second-largest automaker, reported 21% higher sales in May, though overall industry sales are likely to be flat on the high base of last year.
India’s economy grew at a better-than-expected 7.4% in the March quarter from a year ago, as per data released May 30. Previously released numbers showed HSBC Flash India Composite Output Index for May at 61.2 against 59.7 in April, indicating expansion in private sector activity.
Revenues from imports up 25%
“The (GST collection) figures reported for May 2025, which relate to transactions in the first month of FY26, at ₹2.01 lakh crore would provide significant fiscal headroom for the government,” said MS Mani, partner, indirect taxes, Deloitte India. “These figures are also in line with the recent GDP growth estimates, which indicate a robust consumption pattern across months.”
This is the second time in a row GST has exceeded ₹2 lakh crore. The average monthly gross GST collection in FY25 was ₹1.84 lakh crore.
To be sure, the May figure is down from the high of ₹2.38 lakh crore in April, but analysts said collections in that month are traditionally higher. “While last month’s spike was expected with year-end reconciliations, the consistency this month along with a 16% plus year-on-year growth points to strong underlying momentum and a recovery that is clearly taking hold,” said Abhishek Jain, indirect tax head and partner, KPMG.
GST revenues from imports are 25% higher despite tariff headwinds, indicating strength in the economy.
Gross domestic GST collections stood at ₹1.49 lakh crore, up 13.7%. After accounting for refunds, net GST revenue for May was ₹1.73 lakh crore, 20% up from last year.
However, export refunds were down 36.25%. “This suggests that April’s increased exports were primarily on account of companies building their stocks owing to the tariff threat,” said Saurabh Agarwal, tax partner, EY.
Among the large states, Maharashtra, West Bengal, Karnataka and Tamil Nadu reported a 17–25% rise while Gujarat and Telangana clocked a 4–6% increase.
“The wide variations in the growth of GST collections across states require a thorough analysis across the sectors that are important in each state,” Mani said.
Experts also said consistent robust GST collections make a case for rate rationalisation. “If the growth continues in this range for next couple of months, it might provide the cushion for the government to look at rate rationalisation on which a lot of work has already been done,” said Pratik Jain, partner, PwC.
In May, gross central GST revenue stood at ₹35,434 crore, state GST revenue at ₹43,902 crore and integrated GST at ₹1.09 lakh crore. Revenue from cess was ₹12,879 crore.
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