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APRIL-JUNE quarter: Amid slide in GST collections, authorities out to identify causes
The state’s GST collections dropped by 4% to ₹9,248 crore in June 2025, compared to ₹9,601 crore in the same month last year
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: A sustained slide in Goods and Services Tax (GST) collections over the April-June quarter has triggered serious concern in Uttar Pradesh as it is in contrast to a brighter national picture and comes with negative growth in June in the state.
With GST being the state’s main revenue source, the dip has raised red flags in the government. The authorities are now taking all possible steps to identify underlying causes. Officials warn that if the trend persists, it could affect funding for key welfare and development schemes.
On the other hand, Uttar Pradesh’s GST growth in April and May in 2024 was far above the national average. In April 2024, the state’s GST growth over the same month of 2023 stood at 19% against the national average of 13%, it further grew to 22% in May the same year vis-a-vis 15% national average.
“No doubt, the GST growth in the state in the first quarter and more especially in the month of June has been poor causing a concern to all of us,” state tax commissioner Nitin Bansal said.
Apparently, he said, there appeared to be no definite reason for this. It could be due to an economic slowdown, if it is there at all, or it could be because of international situations affecting the import of goods or it could be because of tax evasion etc.
“We are analysing everything but yet to reach any conclusion,” Bansal said, adding, “We have even launched a state-wide drive to verify bonafides of all over 20 lakh registered dealers in the state.”
As per the figures available on the Goods and Services Tax Network portal, Uttar Pradesh, India’s largest state by population, recorded a decline in GST collections during June 2025, bucking the national trend of positive growth in tax revenues.
The state’s GST collections dropped by 4% to ₹9,248 crore in June 2025, compared to ₹9,601 crore in the same month last year.
This decline is in stark contrast to the overall national positive GST growth of 4.6%. The state’s performance places it among the few major states experiencing negative growth, alongside Punjab (-3%) and Assam (-3%). All other states improved their GST collection in June.
Despite the June setback, UP’s first quarter (April-June 2025) performance was a little better. The state showed varied growth patterns across different GST categories during this period.
In the SGST (State Goods and Services Tax) component, which directly impacts state revenues, UP demonstrated resilience with a 3% growth in collections, reaching ₹10,045 crore compared to ₹9,763 crore in the same period last year. This growth in state collections, according to officials, is particularly significant as it represents the portion of GST that remains with the state government for its fiscal operations.
However, the broader IGST (Integrated Goods and Services Tax) collections for the state showed a decline of 3% during the first quarter, indicating challenges in inter-state trade transactions.
In the post-settlement scenario, where revenues are distributed between Centre and states, Uttar Pradesh received ₹21,270 crore during the first quarter of 2025, representing a 4% decline from the previous year’s ₹22,158 crore.
This decline in post-settlement revenues is said to be suggestive of the fact that while the state managed to maintain growth in its direct SGST collections though much below than the last year’ level, the overall GST ecosystem affecting the state showed signs of stress, particularly in inter-state trade activities.
“Uttar Pradesh’s weak showing could be symptomatic of slowing consumption, especially in rural and semi-urban markets, or point to tax evasion that demands closer scrutiny and enforcement. The divergence between a growing taxpayer base and shrinking net collections also raises concerns about the effectiveness of existing administrative mechanisms and settlement processes,” another senior state tax department official noted, adding, “The months ahead will be crucial to watch and act.”
