New Delhi: Central and state governments collected ₹1.85 trillion in Goods and Services Tax (GST) revenue in June, reporting a 6.2% annual improvement, although the revenue receipt was the lowest in four months.

The moderation from the more than ₹2 trillion-level seen in the first two months of the current financial year comes on account of a sharp reduction in tax collection from domestic transactions. GST on imported items also witnessed some moderation in June.

However, cumulatively, in the first quarter, Central and state governments collected ₹6.2 trillion before tax refunds, an improvement of 12% from the corresponding year-ago period, showed data shared by the finance ministry.

In June, tax payers were given a refund of ₹25,491 crore. After adjusting for refunds, net revenue collection stood at ₹1.59 trillion, a 3.3% improvement annually.

Experts said the June GST collections, coupled with a less than 4% growth in advance tax collection for the first quarter of 2025-26, indicate softening of demand and a cautious outlook.

“One of the reasons could be conservative spending by consumers, which may improve in the next couple of months with the overall geopolitical situation improving,” said Pratik Jain, partner at Price Waterhouse and Co. Llp.

Revenue collections in June represent the sales executed in May. India witnessed border tensions with Pakistan in May in the aftermath of the 22 April Pahalgam terror attack.

India’s Goldilocks situation The 11.8% GST revenue growth in the first quarter before adjusting for refunds gives a tax buoyancy of more than 1, which means India is still in a “Goldilocks situation” amid global turmoil, said Vivek Jalan, partner at Tax Connect Advisory Services Llp.

On Tuesday, the eighth anniversary of the 1 July 2017 rollout of GST, the finance ministry said in a statement that annual GST revenues had nearly tripled from ₹7 trillion in FY18 to ₹22 trillion in FY25.

“Consistent double-digit growth signals not just a strengthening economy but a maturing, tech-driven tax ecosystem marked by better compliance, reduced leakages, and lower taxpayer burden,” said the ministry.

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Prime Minister Narendra Modi on Tuesday said roll out of GST, which subsumed 17 central and state taxes into it, is reshaping India’s economic landscape and stimulating growth.

“By reducing the compliance burden, it has greatly improved the ease of doing business, particularly for small and medium enterprises. GST has also served as a powerful engine for economic growth, while fostering true cooperative federalism by making states equal partners in this journey to integrate India’s market,” Modi said in a social media post.