Gross and Net GST revenue collections -July, 2025

New Delhi, August 3, 2025-  The GSTN has released GST revenue data for  July 2025, which shows the usual trend of a rise in gross collection but shows an emerging pattern, that of a staggering rise in refunds, which has had a large dampening effect on the net tax revenues of the government in the month.

The gross GST revenue stood at 1,957.35 crore (increasing by 7.5 percent on a year-on-year basis), but after payment of refunds, the net increase stood at a marginal 1.7 percent. This shortcoming highlights the magnitude and rate of refund settlements, which are now becoming a factor in the fiscal discourse of the Indian business tax environment.

Refunds Surge: Over ₹27,000 Cr Issued in July Alone

During July 2025, a total of 27,147 crore was refunded by GST, a huge rise of 66.8 percent according to the figures in the month of July 2024, which was 16,275 crore. 
1. Domestic Refunds See 118% Spike
Domestic refunds alone surged from ₹7,805 crore in July 2024 to ₹16,983 crore this year, marking a 117.6% increase. This includes:

• CGST: ₹3,317 crore (↑68%)
• SGST: ₹4,542 crore (↑85%)
• IGST: ₹8,647 crore (↑168%) Cess: ₹478 crore (↑197%)

These significant figures of domestic IGST refunds indicate that there was more business by manufacturers and the service providers, especially those who were affected by the inverted duty structures.
2. Export Refunds Continue to Grow

The refunds settled through ICEGATE, the customs portal operated by exporters, increased by a ratio of 20 %to 10,164 crores in the current year, compared to 8,470 crores in the previous year.
This includes:

• IGST: ₹10,014 crore
• Cess: ₹150 crore

Export-linked refunds remain essential when it comes to liquidity in industries such as textiles, electronics, pharma, and IT services. Refunds paid promptly help exporters to manage the input costs and working capital more effectively.

The July 2025 Report:

The report also noted that the collection of gross domestic GST revenue increased by 6.7% to ₹1,43,023, whereas the increase in import-based GST revenue surged by 9.7 percent to ₹52,712 crore.

Net Revenue Growth Slows Despite Strong Collections

The resulting sharp rise in refunds has led to  growth  decline in net tax revenues:

• Domestic net revenue for July dropped marginally by 0.2% year-on-year, from ₹126,231 crore to ₹126,040 crore.
• In contrast, the import-related net GST revenue improved by 7.5%, providing some buffer to the total net performance.

The trend indicates that although the collections are not falling, the government is refunding more than the retained revenue has reduced, and that may affect short-term cash flows.

What This Means for Businesses

The current refund trajectory, particularly in domestic IGST and SGST, reflects multiple positive developments:

1. Improved Backend Systems:
   Automation and faster verification under GSTN are helping process refunds efficiently, reducing delays.
2. Greater Refund Awareness:
   Businesses, particularly  MSMEs and exporters, appear to be better informed about the sort of refunds that are available to them and how to document them, leading to higher claim volumes.
3. Liquidity Relief for Exporters:
   Timely refunds are proving crucial for maintaining working capital amidst tightening global trade margins.

Government’s Compliance Challenge

While the refund growth suggests a maturing system, it also poses compliance risks. As refund volumes surge:

• This is increasing the addition of strict audit control to evade fraudulent claims.
• The balance between speed and accuracy is also a priority to ensure it keeps the faith of taxpayers, and revenue is also protected.

Will Refunds Stay This High?

Looking ahead, continued high refund volumes are likely, especially with the push for exports and as industries recover post-disruptions. The key challenge for authorities will be to:

• Maintain refund timelines
• Ensure refund authenticity
• Preserve fiscal neutrality

This trend marks a turning point in strategy. Refunds are on the rise, which is indicative of a mature system that may strengthen corporate liquidity and taxpayer trust if properly managed.

Conclusion

In summary, the July 2025 GST revenue that was made public on August 1st demonstrates a tax structure that is both expanding and changing. Gross GST collections increased 7.5% year over year to ₹1.96 lakh cr, but net income growth was only 1.7% due to a 66.8% increase in refunds to ₹27,147 cr. In the meantime, export refunds rose 20%, and domestic refunds more than doubled (+117.6%), indicating improved taxpayer awareness and quicker backend processing.

These figures highlight the increasing significance of accuracy, audit compliance, and documentation integrity for companies and fintech platforms that support refund processing, such as MyGSTRefund.

How MyGSTRefund Helps Businesses to Claim Quicker Refunds

MyGSTRefund is an automated platform developed to streamline GST refund claims for Indian exporters. It has already earned the trust of 5,000++ users, processed ₹50 Cr+ in refunds, and is relied on by 500+ startup founders. It enables businesses to maximize their refund claims by reducing documentation errors and refining filings. 

The platform has already made refunds that amounted to 10+ crore within sixty days. Mygstrefund Having a no-refund, no-fee policy eliminates the cost barrier to the users. In the end, MyGSTRefund makes the process of getting a refund an effortless and hassle-free process.

Resource:-https://tutorial.gst.gov.in/downloads/news/approved_monthly_gst_data_for_publishing_july_2025.pdf