GST at 9 — Revenues up 14% in June 2026 but dependence on imports increased, domestic sales lagged
The government’s Goods and Services Tax (GST) revenue grew 13.9% to ₹1.95 lakh crore in June 2026, the highest growth rate in 13 months. However
The government’s Goods and Services Tax (GST) revenue grew 13.9% to ₹1.95 lakh crore in June 2026, the highest growth rate in 13 months. However, the bulk of this growth came from imports, with the tax collected from domestic transactions growing far slower. Further, as GST marked nine years of implementation on July 1, tax experts point to several aspects — such as input tax credits, dispute resolution, multiple registrations, and the inverted duty structure — as issues that still need to be addressed. However, they do acknowledge that the system has been steadily improving over the years. Rising import reliance The data shows that GST revenue from domestic transactions grew 6.5% to about ₹1.35 lakh crore in June 2026. This made up 69% of the total GST revenue earned that month, down from the 74% share it held in June last year. Revenue from imports, on the other hand, grew nearly 35% in June 2026 to ₹6 lakh crore. This marks the 16th consecutive month in which GST revenues from imports have grown in double digits, and the 10th straight month in which their growth has exceeded the growth in revenues from domestic transactions.
Tax experts are divided about the cause for this sharp rise in revenues from imports, but they agree that it is something the government must keep an eye on. Higher prices or more imports? According to Saurabh Agarwal, tax partner at EY India, a possible reason could be that India is importing what it should be manufacturing. “The rising share of collections from imports warrants closer structural analysis,” Mr. Agarwal said. He pointed out that one way to mitigate this reliance is to redeploy unutilised outlays from the Production Linked Incentive (PLI) schemes to strategically attract and scale high-value manufacturing within India. Mahesh Jaising, partner and indirect tax leader at Deloitte India largely echoed these views, saying that the growth in import revenues suggest an increase in the import of raw materials and intermediate goods, which reflects sustained manufacturing activity. However, another possible reason, as voiced by Pratik Jain, partner at Price Waterhouse & Co is that revenues from imports are growing because the prices of imported goods have also increased across many commodities. Structural improvements Looking ahead at what remains to be done in GST after nine years in operation, the tax experts pointed to a number of structural and legislative issues that need to be addressed.
“At a structural level, you have real estate, petroleum products, liquor, agriculture and education either outside of GST or exempt,” Mr. Jain said. “I think now that GST has stabilised, it’s the right time for us to start a debate as to how some of these can be included.” I don’t think it will happen immediately and I don’t see passenger fuels coming in soon, but things like aviation turbine fuel (ATF) and natural gas are low hanging fruit because the revenue implications are not significant,” he added. The other area he said that needed work was resolving the inverted duty structure that has become more of a problem since the GST rates were rationalised in September last year. An inverted duty structure arises when a final product is taxed lower than the rates applied on its inputs. This means companies end up paying higher tax on their inputs than they collect when they sell a product. Not all of this gets refunded. Easing compliance Apart from these, Karthik Mani, partner with the tax and regulatory practice of BDO India pointed out that the “wish list” of industry and taxpayers is clear.
The BriefWire