The net GST collections of ₹2,714 crore in May 2025 represent the actual revenue available to the state after IGST settlements and other adjustments.
Published Jun 02, 2025 | 11:20 PM ⚊ Updated Jun 02, 2025 | 11:20 PM
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Synopsis: Andhra Pradesh recorded its highest-ever May GST collections since 2017 at ₹2,714 crore in May. Despite a 2.24 percent decline in gross GST collections due to reduced cess, SGST, and CGST inflows, the state’s net collections rose, supported by improved compliance, IGST settlements, and strategic enforcement.
In what should come as welcome news for the cash-strapped Andhra Pradesh government, Goods and Services Tax (GST) collections for May 2025 stood at a record ₹2,714 crore.
This marks the highest-ever May collection since the introduction of the Andhra Pradesh GST Act in 2017.
“This milestone underscores the state’s ability to reverse the declining revenue trends observed in November and December 2024, reflecting a robust economic recovery and effective tax administration,” said Chief Commissioner of State Tax Babu in a press statement.
The May 2025 net GST collections, when combined with an Integrated GST (IGST) settlement of ₹1,524 crore, point to Andhra Pradesh’s strong fiscal performance.
This achievement is especially significant as it exceeds the net collections of May 2024.
The growth is attributed to an enhanced tax collection framework, improved settlement adjustments, and an increase in the number of registered taxpayers.
April 2025 was an exceptional month, setting the stage for May’s record-breaking performance.
The net GST collections of ₹2,714 crore in May 2025 represent the actual revenue available to the state after IGST settlements and other adjustments.
This figure is critical, as it indicates funds directly available for state expenditure and offers a clearer picture of fiscal health than gross collections, which include total taxpayer payments.
“There is a consistent rise in tax collections which points to a strong state economy, with strategic measures yielding tangible results,” Babu stated.
However, gross GST collections for May 2025 recorded a negative growth of minus 2.24 percent compared to May 2024, largely due to declines in certain tax components: cess collections dropped by ₹52 crore (minus 20.02 percent), State GST (SGST) by ₹51 crore (minus 4.11 percent), and Central GST (CGST) by ₹40 crore (minus 4.01 percent).
“Despite these declines, the strength of net collections helped cushion the overall impact on actual state revenue,” Babu said.
“The resilience is due to Andhra Pradesh’s focus on strengthening tax compliance and settlement processes.”
The drop in gross collections was partly attributed to external factors.
The central government reduced ₹796 crore under the “Advance IGST Apportionment Adjustment” to offset deficits in the IGST balance as of 31 March 2025.
Additionally, a ₹86 crore IGST reconciliation settlement for the financial year 2025–26 contributed positively to the state’s May revenues.
Central tax collections declined by 7.2 percent year-on-year for April–May 2025, while state tax administration recorded a 3.2 percent growth in the same period.
Thus, had central tax collections remained stable, overall GST growth could have exceeded 3 percent, underlining the impact of central adjustments on the gross revenue figures.
The press note also pointed to the indirect impact of IGST collections on state revenue.
Under GST regulations, IGST paid by Andhra Pradesh taxpayers is often transferred to other states.
This affects the overall revenue share, especially when taxpayers adjust SGST credits against IGST liabilities.
Nonetheless, SGST collections have remained stable, supported by local consumption and a growing base of registered taxpayers.
This ensures that volatility in IGST or cess does not significantly disrupt state revenues.
Andhra Pradesh’s strong performance in May 2025 is attributed to strategic initiatives, including improved return filing, robust investigation processes, integration with local systems, and action against defaulters.
The state has acted against taxpayers who failed to file returns despite significant tax payments in the previous financial year.
Measures include identifying and targeting assets and bank accounts of defaulters.
The 0.06 percent growth in net revenue collections over the previous year reflects the state’s ability to generate steady cash inflows, despite fluctuations in individual tax components.
This growth – driven by SGST receipts and IGST settlements – demonstrates economic resilience and effective tax administration.
The press note further said that the state’s fiscal health is best gauged by net revenue collections, which account for SGST and IGST settlements.
(Edited by Dese Gowda)
