RECENT DEVELOPMENTS IN GOODS AND SERVICES TAX

IMF has improved India’s GDP growth forecast to 6.4% from 6.2% for the FY 2026, just before the imposition of US tariffs because of external environment and local inflation. According to MoF, Indian economy continues on firm footing but there are global worries such as Chinese supply chains and US tariffs. The economy is growing steadily.

US President has recently uttered that Indian and Russian economies are ‘dead economies’. US has also imposed25% tariff and unspecified penalty on Indian exports w.e.f. 1 August, 2025. However, Indian Government has stated that it will protect the interests of Indian exporters, traders and farmers. This step may not have a major impact on long term basis but may impact Indian businesses in short term. US tariff may adversely impact GDP growth but not substantially as it is not likely to impact domestic demand or market.

It remains a fact that Indian economy is fourth major economy in the world and is also growing at a much faster pace than the US or world itself. Other countries facing US tariffs are Brazil, Chine, South Africa, Indonesia, Japan and many other countries. At present, among large economies, India’s tariff is one of the highest but it has fallen sharply between 1990 and 2022. On the other hand, US tariffs on India have been low.

Kerala has become the first state to introduce ‘faceless adjudication’ in GST w.e.f. 01.08.2025. A pilot project is being launched. In this system, the adjudicating authority and the taxpayer will not interact directly with each other. All procedures related to taxation will be carried out through digital platforms and electronic communication. From August 1, the faceless adjudication system will be piloted in Pathanamthitta and Idukki districts. The system’s roll-out will make Kerala the first Indian State to introduce it for indirect taxes. The ‘faceless adjudication system’ does away with the need for the taxpayer to visit the offices of the SGST Department. The taxpayer’s version on show-cause notices will be heard by a ‘faceless adjudicating authority’ via an online meeting platform. For submitting supporting documents, taxpayers can use the GST common portal. This is a welcome step and may be followed by other states too.

GST Council’s next meeting is yet not decided and it does not seems to be happening soon. Many important decisions and reforms are due to taken up by the GST Council.

On GSTAT front, about a half a dozen technical members have since been selected so far. There is no clear sight of actual commencement of business at GSTAT.

GST collection in July, 2025 has shown a growth of 7.5% in gross total collection and 6.7% growth in domestic revenue collection on YoY basis. Total GST collection stood at Rs. 1,95,735 crore as against Rs. 1,82,075 crore in July, 2024. However, domestic refunds grew by 117.6% to Rs. 16,983 crore as against Rs. 7,805 crore only in July, 2024. Total net GST revenue stood at Rs. 1,68,588 crore with a rise of just 1.7% against Rs. 1,65,800 crore in July, 2024. This increased collection has been witnessed despite recent geo-political tension and weak consumer sentiments. However, the pattern indicates a consistent and stable consumption and collection. Though IGST collection has also grown, it may be impacted in next few months due to recent US tariffs.

GST on Apartment Maintenance Charges

Union Finance Minister’s response to question on GST on apartment maintenance charges in Lok Sabha on 28 July, 2025 states that:

• No GST compliance requirements have been placed upon the residents who are the service recipients irrespective of the amount of maintenance paid.
• Services provided by an apartment association (an unincorporated body or a registered non-profit entity) to its own members against maintenance charges up to Rs. 7,500/- per month per member are already exempt from GST.
• There is no requirement under CGST law to obtain any official letter by the resident or apartment associations regarding their apartment’s GST status.
• Apartment associations having maintenance charges up to Rs. 7,500/- per month per member or having aggregate turnover of goods and services below the threshold need not be registered under GST.
• The services by an apartment association to its own resident members, where the maintenance charges are greater than Rs. 7,500/- are taxed at the rate of 18%.
• If any due tax has not been paid under the GST Act, the taxpayers are provided with an option to pay either no penalty or reduced penalty provided they are ready to pay the due tax within a specified time period.

(Source: Starred Q.No. 109, answered on July 28, 2025

by Finance Minister in Lok Sabha)

GST Collection in July, 2025

• Gross GST collection in July, 2025 has shown a growth of 7.5% at Rs. 1,95,735 crore against Rs. 1,82,075 crore in July, 2024.
• In domestic collection, growth is 6.7% with Rs. 1,43,023 crore and Rs. 52,713 crore coming from IGST cess
• Total refunds stood at Rs. 27,197 crore as against Rs. 16,275 crore reflecting an increase of 66.8%.
• Net customs revenue was recorded at Rs. 42,548 crore with 7.5% growth on YoY basis.
• Total net GST refund has been recorded at Rs. 1,68,588 crore as against Rs. 1,68,800 crore in July, 2024, just 1.7% up.
• State wise collection has shown double digit growth in Himachal Pradesh, Punjab, Haryana, Bihar, Nagaland, Tripura, West Bengal, Madhya Pradesh, Andaman and Andhra Pradesh.
• However few states like Jammu & Kashmir, Manipur, Mizoram, Chhattisgarh, Lakshadweep etc have recorded a negative growth.