The central government collected Rs 1.94 lakh crore as Goods and Services Tax (GST) in May, 3.2% more than it did in the same month last year, the Ministry of Finance said on Monday, adding that the year-ago indirect tax number was boosted by a one-time payment of Rs 10,000 crore by a telecom operator for spectrum allocation.

“Adjusted for this one-time payment, Gross GST Revenue grew 9% in May 2026 with Domestic Gross GST growth being 5%. Adjusted Net GST Revenue growth in May 2026 was 10.1%. With no one-time payment in May 2026, adjusted growth is therefore the right measure to evaluate the GST performance for the month,” the finance ministry said in a footnote to the GST data release.

Net GST revenue is arrived at after accounting for refunds. The gross GST collected in May was 20% lower than April’s record Rs 2.43 lakh crore.

However, the latest data shows some sign of a slowdown in consumption. While the total GST collection last month was up 3.2% year-on-year, the gross domestic revenue was down 2.6% at Rs 1.35 lakh crore.

Government sources argued that taxable supply of goods rising 27% from Rs 31.71 lakh crore to Rs 40.1 lakh crore in April – data for May is for transactions done in April – is indicative of the “breadth and durability” of domestic demand.

“Taxable supply is a good proxy for consumption in the economy. This growth is not concentrated in any single segment but spans agriculture, manufacturing, chemicals, metals, electronics, and consumer goods simultaneously. The domestic economy is therefore experiencing genuine demand expansion, which was the intent of the GST rate rationalisation carried out in September 2025,” sources said.

The GST Council had, effective September 22, 2025, announced sweeping tax rate cuts for more than 375 items as part of its GST 2.0 reforms.

While the taxable supply of goods rose 27% in April, that of services was up 22% at Rs 11.5 lakh crore, with every major service category registering positive growth. This, sources said, is noteworthy because services GST is “less cyclical and stickier, providing a stable and growing foundation for the overall revenue stream”.

Among goods, some of the largest year-on-year increases in the taxable supply in April was seen in tobacco products (up 72% YoY), gold and precious metals (up 47%), and other metals and articles (up 57%). All these three categories have seen a rise in prices in recent months.

On the services side, domestic and other services (up 121%) and real estate services (up 50%) showed the largest increases in taxable supply in April, officials said.

While domestic GST revenue fell in May, that from imports jumped 19.1% to Rs 59,654 crore, the data released Monday showed. This comes at a time when India’s import bill is rising due to elevated energy prices and the rupee’s exchange rate is under intense pressure. Data released last month showed India’s merchandise trade deficit rose to a three-month high of $28.38 billion in April on the back of gold imports surging 82% year-on-year to $5.63 billion. The total goods imports bill, meanwhile, rose 10% to $71.94 billion.

Again, government officials said that the rise in Integrated GST revenue from imports “signals industrial capacity expansion”.

“The bulk of this import growth is driven by raw materials and intermediate inputs that feed India’s industrial production chain,” sources said, pointing out that the processing units and memory chips had recorded more than 200% growth in IGST in May among electronic components. IGST for copper inputs and aluminium scrap also saw a massive growth. This, sources said, benefits wire and cable production, electrical equipment, and the renewable energy supply chain.

A sharp increase in the IGST of these items may also be due to a rapid increase in prices of memory chips, copper, and aluminium. The war in West Asia has triggered a global aluminium supply deficit, with ratings agency Crisil saying on Monday that this is likely to drive aluminium prices to record highs.

IGST on imported coal also rose sharply in May. This reflects the heightened fuel and coking coal requirements of steel plants, cement kilns, and thermal power generation.