GST Collections hit 1.84 lakh crore in Feb-25, mark spurt of around 9%

India's gross goods and services tax (GST) collections rose 9.1 per cent to about Rs 1.84 lakh crore in February 2025. According to official data released on Saturday, March 1, on a gross basis, mop-up from the central GST stood at Rs 35,204 crore, state GST at Rs 43,704 crore, integrated GST at Rs 90,870 crore, and compensation cess at Rs 13,868 crore in the month under review. GST revenues from domestic transactions jumped 10.2 per cent to Rs 1.42 lakh crore, while those from imports grew 5.4 per cent to Rs 41,702 crore during February. The total refunds issued during February were Rs 20,889 crore, a 17.3 per cent increase over the year-ago period. The net GST collections during February 2025 grew 8.1 per cent to about Rs 1.63 lakh crore. India's gross and net GST revenues in February 2024 were Rs 1.68 lakh crore and Rs 1.50 lakh crore, respectively. However, the gross GST collections in February 2025, at Rs 1.84 lakh crore, are lower than the Rs 1.96 lakh crore collected in January 2025.

Income-tax Bill 2025 tabled in Parliament, no major tax policy changes to ensure continuity

The Income-tax Bill, 2025 was tabled in Parliament today, marking a significant step toward simplifying the language and structure of the Income-tax Act, 1961. The simplification exercise was guided by three core principles: textual and structural simplification for improved clarity and coherence, no major tax policy changes to ensure continuity and certainty and no modifications of tax rates, preserving predictability for taxpayers.

India’s net direct tax collection, comprising corporate tax and personal income tax, increased by 14.69% to cross Rs 17.78 lakh crore as of February 10 in the current financial year, compared to Rs 15.51 lakh crore in the same period of 2023-24, according to data released by the Central Board of Direct Taxes (CBDT). The gross direct tax revenue spiked by 19.06% to exceed Rs 21.88 lakh crore, up from Rs 18.38 lakh crore in the corresponding period of the previous year.

Revenue from net non-corporate taxes, primarily personal income tax, grew by 21% year-on-year to Rs 9.48 lakh crore during this period. Meanwhile, net corporate tax collection rose by over 6% to more than Rs 7.78 lakh crore between April 1, 2024, and February 10, 2025. Data showed that collections from securities transaction tax (STT), which also falls under direct taxes, recorded a sharp 65% increase, reaching Rs 49,201 crore so far in the financial year.

Refunds amounting to more than Rs 4.10 lakh crore were issued during the period, marking a 42.63% rise compared to the previous year. According to senior officials, this reflects improved efficiency in the Income Tax Department’s refund process. The double-digit growth in direct tax collections indicates rising corporate profits in a growing economy and a generally supportive business environment.

Outlook:

Total government receipts stood at 24 lakh crore rupees, while overall expenditure in April to January was at 35.70 lakh crore rupees. They were 76.3% and 75.7% of this fiscal year's revised budget targets. International Monetary Fund or IMF has state in a latest update on Indian economy that continued fiscal normalization is appropriate given a broadly closed output gap and elevated debt. The moderately contractionary fiscal deficit for 2024/25 is fitting. The acceleration in the execution of capital expenditure in the second half of the year is welcome. However, the use of windfall gains such as high RBI dividends to finance permanently higher recurrent expenditure should be avoided.

States should refrain from expanding recurrent expenditure at the expense of capital expenditure. The 2025/26 budget substantially raised the personal income tax-free threshold, bringing it well above peers and leading to 0.3 percent of GDP in foregone revenue. IMF opined that challenges in meeting the budgeted recurrent expenditure reduction may weigh on budget execution in 2025/26. Contingent liabilities arise from government guarantees, loss-making SOEs, particularly in the power sector, and unfunded civil service pensions liabilities (Annex VIII). Rising commodity prices would lead to higher subsidies. Better targeting of subsidies would reduce the exposure from commodity prices while still supporting the vulnerable. Regular revision of power tariffs, pricing all services provided by utilities, and continuing incentives to improve efficiency would improve the power distribution companies’ (DISCOM’s) financial health.