GST collection: Import surge helped drive up GST mopup in May: Nomura

New Delhi: The goods and services tax (GST) collection growth, which accelerated to 16.4% in May, outpacing nominal GDP growth, was driven by a sharp pickup in GST from imports that registered its highest monthly contribution in nearly three years, rating agency Nomura said Monday.

The rating agency also said India’s economy is expected to see GDP growth moderate to 6.2% in FY26 from 6.5% in FY25.

Meanwhile, the strong GST collections came as a surprise, given soft trends in other high-frequency growth indicators, it said, adding that it will be closely tracking this divergence in coming months.

India collected ₹2.01 lakh crore in GST in May, up 16.4% year on year. “GST from imports picked up sharply, registering the highest monthly contribution to headline GST growth in nearly three years, which chimes with evidence of a sharp increase in imports in recent months, possibly due to the frontloading of exports (leading to higher imports of inputs from China) and the rerouting of exports through India,” the report said.

The report added that domestic GST collection growth has also been strong in May, picking up to nearly 14%, up from 10% in the previous two months, which suggests a robust pace in domestic activity in April.