India’s GST Revenue Surges 9.1% in February 2025 – A Detailed Analysis

Introduction

India’s Goods and Services Tax (GST) collection continues to show strong growth, with February 2025 reporting a 9.1% year-on-year (YoY) increase, reaching ₹1.84 lakh crore. This growth is driven by higher domestic demand, improved tax compliance, and better enforcement measures.

The consistent rise in GST revenue highlights India’s economic resilience and improved tax administration. In this article, we will analyze the factors driving this growth, state-wise trends, and what this means for businesses and the economy.

GST Collection Breakdown – February 2025

The overall GST revenue in February 2025 was ₹1.84 lakh crore, compared to ₹1.68 lakh crore in February 2024. The key components of the revenue are:

GST Component	Feb 2024 (₹ Cr)	Feb 2025 (₹ Cr)	% Growth
CGST	31,785	35,204	10.8%
SGST	39,615	43,704	10.3%
IGST (Domestic + Imports)	84,098	90,870	8.1%
CESS	12,839	13,868	8.0%
Total GST Revenue	1,68,337	1,83,646	9.1%

Domestic vs. Import GST Revenue

• Domestic GST revenue increased 10.2% YoY to ₹1.42 lakh crore, showing strong domestic consumption and business activity.
• GST from imports grew 5.4% YoY to ₹41,702 crore, reflecting moderate international trade expansion.

Refunds & Net GST Revenue

• Total GST refunds surged 17.3%, reaching ₹20,889 crore, indicating higher claims from exporters and businesses.
• Net GST revenue (after refunds) for February 2025 was ₹1.63 lakh crore, showing an 8.1% YoY increase.

State-Wise GST Collection Performance

Several states witnessed double-digit GST revenue growth, indicating broad-based economic expansion.

State	Feb 2024 (₹ Cr)	Feb 2025 (₹ Cr)	% Growth
Haryana	8,269	9,925	20%
Madhya Pradesh	3,572	4,090	15%
Rajasthan	4,211	4,787	14%
Maharashtra	27,065	30,637	13%
Delhi	5,544	6,074	10%
Tamil Nadu	9,713	10,694	10%

However, some northeastern and smaller states experienced a decline:

• Lakshadweep (-55%)
• Ladakh (-46%)
• Mizoram (-16%)

This suggests regional disparities in economic growth, potentially due to infrastructure limitations or lower business activity.

Key Factors Driving GST Growth

1. Economic Expansion and Higher Consumption

   • Increased domestic demand has led to higher GST collections.
   • Strong growth in the services sector, manufacturing, and retail trade contributed significantly.

2. Improved Compliance and Tax Administration

   • The government’s crackdown on fake GST registrations has improved compliance.
   • Automation of tax filings and AI-driven fraud detection have enhanced enforcement.

3. Increase in Digital Transactions

   • Higher adoption of UPI, credit cards, and online payments has helped bring more businesses into the tax net.

4. Higher Tax Base Due to GST Reforms

   • Implementation of e-invoicing and stricter return filing norms has boosted collections.

5. Moderate Growth in Import GST

   • While domestic GST saw strong growth, import GST growth (5.4%) was slower, possibly due to global economic challenges.

Implications for Businesses and the Economy

For Businesses

✅ Businesses should ensure timely GST compliance to avoid penalties.
✅ Increasing digital transactions and tax transparency means businesses must maintain proper records.
✅ E-invoicing and ITC claims monitoring will be crucial to avoid compliance issues.

For the Indian Economy

✅ Higher GST revenue signals economic stability and rising consumption.
✅ Increased tax collection can help the government meet fiscal targets and invest in infrastructure.
✅ A moderate increase in import GST suggests a need to boost global trade competitiveness.

Future Outlook for GST in India

The steady 9%+ growth in GST collections indicates that India’s tax system is stabilizing and becoming more efficient.

Expected Trends in 2025

• Stronger compliance measures may further improve tax collection.
• Introduction of new GST slabs or rate changes could impact revenue distribution.
• Digitalization and AI-driven tax monitoring will enhance accuracy and reduce fraud.

However, global trade challenges, inflation, and geopolitical uncertainties could impact import-related GST revenue. The government’s focus on expanding compliance and tax base will be crucial in maintaining momentum.

Conclusion

India’s GST revenue growth of 9.1% in February 2025 highlights a strong economy, improved tax compliance, and digital transformation in the taxation system.

With continued policy enhancements, enforcement measures, and digital adoption, GST collections are on track to exceed fiscal targets in the coming months.

Businesses must stay updated on GST regulations to ensure compliance and benefit from government initiatives.

For more updates on GST and business taxation, stay tuned to our platform.