ECONOMIC DEVELOPMENTS AND GST COLLECTION

India's FM has expressed that our economy is robust despite West Asia crisis and external challenges putting pressure on 3 Fs - fuel, fertilizer and forex. Government is taking measures from tax cuts to new credit lines for businesses with Government guarantee and support to exporters. These challenges are external driven and Government is taking all measures to lower the impact including bearing the fiscal burden.

The West Asia crisis is not only a diplomatic or geopolitical issue. For businesses and common people, it can mean higher fuel costs, delayed cargo, costlier shipping, shortages of inputs, pressure on working capital and uncertainty in export orders. Appeal to conserve foreign exchange must be viewed in the context of volatile global commodity markets and rising import costs.

As per RBI, ongoing west Asia conflict poses risks to domestic growth and inflation, in the short run, even as the economy is expected to be resilient in 2026-27. Lingering geo - political tensions and supply chain disruptions may pose near term risk to corporate earnings and bank's performance. Real GDP growth's expected to be 6.9% in FY 2027.

According to an opinion poll by a economic daily, Indian economy may record a growth of 7.6% for the FY 2026 in the backdrop of robust domestic demand, agricultural activity and services sector. GDP growth projections of various agencies / bank range between 7.4% to 7.6%.

Supreme court has in its judgment on 27 May, 2026 [Directorate General of Goods And Services Tax Intelligence (Hqs) & Ors. Versus Gameskraft Technologies Private Limited And Ors. - 2026 (5) TMI 1822 - Supreme Court] in bunch of writ petitions / appeals in relation to levy of GST on online gaming activities, has upheld the levy of GST @ 28% retrospectively on the full face value of bets placed true in real money gaming (RMG) platforms. In yet another case, it has held that State Governments have a right to enact laws to prohibit online money gaming in their state jurisdictions. Centre has already enacted the new regulation i.e., Promotion and Regulation of Online Gaming Rules, 2026 w.e.f. 01.05.2026.

In yet another important pronouncement, apex court has issued directions on pronouncement of orders by high courts to ensure that there are no abnormal delays in dispensation of justice by courts. Bail plea orders should be pronounced on the same day or latest by next day. If the order is reserved in orders once reserved by high court, judgment must ordinary be delivered within 3 months. However, faster verdicts are expected in matters involving personal liberty.

GST collection figures for the month of May, 2026 are out and there is a gross domestic revenue collection of Rs. 1,34,530, lower by 2.6% from May, 2025. However, total gross GST revenue is Rs. 1,94,184 crore showing a growth of 3.2% over May, 2025 (Rs. 1,88,172/- crore). Refunds are just 2.6% higher at Rs. 10,250 crore on YoY basis. Total net GST revenue stood at Rs. 1,66,904 crore, 3.3% higher than May, 2025 (Rs. 1,61,585 crore). The revenue in May, 2026 has not shown any significant movement and is thus, a normal month from collection view point. However, economy has also slowed down a bit due to West Asia crisis.

GST Collection in May, 2026

• Total gross GST collections rose by 3.2% to over Rs.1.94 lakh crore in May, 2026 whereas Gross GST collection stood at Rs.1.88 lakh crore in May, 2025.
• IGST collection from imports rose 19.1% during May to Rs.59,654 crore, signaling expansion in industrial capacity.
• GST refunds grew by 2.6% to Rs.27,281 crore as against Rs. 26,587 crore in May, 2025.
• After adjusting refunds, net GST revenues in May rose 3.3% to about Rs.1.67 lakh crore. GST mop-up in April reached an all-time high of Rs.2.43 lakh crore.
• It may be noted that May 2025 GST Revenue includes Rs. Rs. 10,000 crore of one-time payment made 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.
• States / UTs like Chandigarh, Dadra Nagar Haveli, Mizoram, Haryana, Telangana, Uttar Pradesh, Andhra Pradesh have shown positive growth where as states / UTs like Himachal Pradesh, Jammu & Kashmir, Delhi, Rajasthan, Sikkim, Assam, West Bengal, Orissa, Pondicherry etc have recorded a negative growth.

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