India’s GST collections touched a new peak in April 2026, offering a positive headline number. However, a closer look shows that much of this growth is being driven by imports, while domestic demand appears to be growing at a slower pace.
Gross collections stood at Rs 2.43 lakh crore in April, up from Rs 2 lakh crore in March. Compared to April last year, this marks a growth of 8.7%.
Net collections, after adjusting for refunds, came in at Rs 2.11 lakh crore, showing a 7.3% rise year-on-year.
Over the past few years, GST revenues have steadily climbed, from Rs 1.67 lakh crore in April 2022 to the current record level, highlighting improved compliance and a broader tax base.
A major part of April’s growth came from import-related revenues. GST collected on imports rose sharply by 25.8% to Rs 57,580 crore.
This spike is linked to rising global prices and supply disruptions, particularly due to geopolitical tensions in West Asia. Higher crude prices also played a role in pushing up import values.
While overall collections are strong, domestic GST growth was more modest. Gross domestic revenue grew 4.3% to Rs 1.85 lakh crore.
At the same time, refunds increased significantly, especially on the domestic side. Total refunds rose 19.3%, with domestic refunds jumping over 50%. This reduced the net gains from domestic collections.
Vivek Jalan, Partner at Tax Connect Advisory Services LLP, explained the trend:
“India’s GST collections in April 2026 once again crossed the Rs 2 lakh crore milestone, with net revenues rising 7.3% year-on-year to Rs 2.11 lakh crore. The surge was powered by a 42.9% jump in net customs GST collections, reflecting higher import costs amid global supply chain disruptions and war-driven commodity movements.”
He also pointed out that domestic numbers need a closer look:
“Gross domestic GST revenues stood at Rs 1.85 lakh crore, up 4.3% from April 2025, underscoring wider compliance coverage. However, net domestic collections remained flat as refunds, primarily under the inverted duty structure, spiked by 54%.”
Jalan highlighted that policy and compliance changes also played a role in April’s numbers.
“A major compliance shift also shaped April’s inflows: the recalibration of ITC set off sequencing on the GST portal,” he said, referring to changes in how tax credits are adjusted.
He added that some collections were supported by advance payments linked to tax disputes.
“Additional support to domestic collections came from pre-deposits linked to Section 74 orders for FY 2019-20 issued before March 31, 2026.”
Another key issue is the rise in refunds and input tax credit (ITC) accumulation, especially under the inverted duty structure.
“These refunds exclude the growing ITC accumulation on input services, which continues under GST 2.0’s deepened inverted duty framework. While this accumulation has maintained collections, it has simultaneously raised business expenses,” Jalan noted.
This issue has already been flagged to the GST Council and may be discussed in its upcoming meeting.
Even with global uncertainties, including tensions in West Asia and rising oil prices, GST collections continue to grow in absolute terms.
However, the data suggests a subtle shift. Growth is increasingly being supported by imports and compliance-related factors, rather than strong domestic consumption.
This could mean that while the headline numbers remain strong, the underlying demand story may need closer attention in the coming months.