The Goods and Services Tax (GST) collections in India surged to a record ₹2.37 lakh crore in April 2025, reflecting a 12.6% increase compared to the same month last year. This marks a significant milestone in the country’s tax revenue collection, driven by the consistent upward trend in economic activity and consumer spending. The government had earlier projected a growth of 11% for the year, estimating total GST revenue of ₹11.78 lakh crore, and the latest figures indicate that the economy is on a strong recovery trajectory.

The April 2025 figures mark the highest-ever GST collection in a single month, surpassing the previous record of ₹2.10 lakh crore collected in April 2024. The consistent growth in collections points to a solid rebound in India’s economic landscape, with the country’s indirect tax system gaining momentum.

GST revenue from domestic transactions increased by 10.7%, contributing approximately ₹1.9 lakh crore. The revenue from imported goods saw a notable rise of 20.8%, amounting to ₹46,913 crore, showcasing the robust performance in both internal and external trade.

This rise in GST collections underscores the government’s efforts to streamline tax systems and boost compliance, alongside increased consumer demand and business activities in the country. The finance ministry has continued its push for digital transactions, which has been instrumental in improving tax collection processes and curbing tax evasion.

India’s consistent growth in GST collections over the last few months – including a 9.9% increase in March 2025 and 9.1% in February 2025 – aligns with the broader economic recovery, bringing confidence in India’s long-term fiscal health.

The Ministry of Finance of India has officially denied recent rumors claiming that the government was planning to impose Goods and Services Tax (GST) on Unified Payments Interface (UPI) transactions exceeding ₹2,000. The government has termed these rumors as baseless and misleading, stressing that such claims were unfounded.

UPI, a digital payment platform launched by the National Payments Corporation of India (NPCI), has revolutionized financial transactions in the country, allowing millions of users to send money and make payments with ease. With no Merchant Discount Rate (MDR) charges applicable on UPI transactions, the government has emphasized that there is no GST involved in such transactions.

The clarification comes amid a wave of misinformation circulating about a potential tax on higher-value UPI transactions. The Ministry reassured the public that these claims were false, reaffirming the government’s unwavering commitment to promoting digital payments and ensuring the continued growth of UPI, which has emerged as a leader in the global digital payment landscape.

The government has also emphasized its ongoing efforts to enhance financial inclusion and support the development of a cashless economy. As of now, UPI continues to be free from any additional charges like GST, making it a vital tool in India’s growing digital economy.

The Ministry’s statement serves as a reminder that the government remains focused on simplifying the tax structure and supporting technological innovation in the payments sector. With UPI playing a crucial role in India’s digital payment ecosystem, the government’s clarification aims to dispel doubts and ensure that the public can continue to rely on this secure, efficient platform for their transactions.

In a significant crackdown on tax fraud, Central and state Goods and Services Tax (GST) officers have uncovered 25,009 fake firms involved in fraudulently passing input tax credit (ITC) worth ₹61,545 crore during the 2024-25 fiscal year. The authorities have also managed to recover ₹1,924 crore by blocking ITC and have arrested 168 individuals in connection with the fraud.

The detection of these fake firms, which were primarily engaged in generating and passing fake ITC, comes as part of the government’s ongoing efforts to curb tax evasion and enforce stricter compliance under the GST regime. The fraud occurred across multiple sectors, with a number of fake entities allegedly involved in manipulating invoices to gain unauthorized tax credits.

The officers’ efforts to combat this issue were intensified through a series of raids and audits conducted throughout the fiscal year. The crackdown resulted in the recovery of ₹1,924 crore, which had been fraudulently claimed by these fake companies. Additionally, the government has started tightening the GST registration process, making it harder for such fraudulent firms to operate undetected. Measures are also in place to track down the masterminds behind these illegal operations and ensure that they are brought to justice.

The detection of such a large-scale fraud highlights the challenges that the Indian tax authorities face in curbing illegal practices under the GST framework. The government is taking steps to strengthen its monitoring systems, enhance the capabilities of its officers, and bring about greater transparency to ensure that GST collections are not compromised by unscrupulous entities.

Authorities have vowed to continue their efforts in rooting out tax evasion, with further investigations underway into the scope of the fraud and the individuals involved. In light of the growing number of fake firms being discovered, additional reforms are expected to streamline the GST registration process and ensure stricter verification of entities seeking to register under the system.

As India works to tighten its tax systems and improve compliance, the action against the fake firms is a clear indication that the authorities are determined to protect the integrity of the GST framework and recover the government’s dues from fraudulent claims.

India’s Goods and Services Tax (GST) collections for March 2025 reached ₹1.96 lakh crore, marking a 9.9% increase compared to the same period last year. This rise in collections comes after a previous increase of 9.1% in February, when the GST collections stood at ₹1.83 lakh crore, driven by a significant boost in the tax receipts from domestic sources.

The surge in GST collections reflects strong economic activity, supported by increased consumption and a rise in business transactions across various sectors. The government’s push for digitization and improved compliance has also played a crucial role in enhancing tax revenue collection.

The GST Council, a key decision-making body for the indirect tax system in India, has been working to streamline and simplify the tax structure in the country, resulting in higher tax collections and improved compliance rates.

This uptick in GST receipts is seen as a positive sign for the country’s fiscal health, signaling a robust economic recovery and increased financial stability. Experts predict that such growth could help in meeting the revenue targets set for the fiscal year.

The Bombay High Court is set to hear the Rs 100 crore Goods and Services Tax (GST) dispute involving Mad Over Donuts (MOD) on March 24, 2025. The outcome of this case is expected to have far-reaching implications on how restaurant and bakery services are taxed under the GST framework in India. The court’s decision could provide much-needed clarity on whether takeaway food should be taxed as a service or as a separate sale of goods.

Background of the Case

Mad Over Donuts (MOD), owned by Himesh Foods, is a well-known bakery chain in India, specializing in donuts and other confectionery products. The dispute arose when the Directorate General of GST Intelligence (DGGI) issued a consolidated show-cause notice (SCN) covering multiple financial years from 2017-18 to 2023-24, demanding approximately Rs 100 crore in unpaid taxes.

At the core of the dispute is the classification of MOD’s products under the GST regime. The company argues that its sales should be considered a composite supply of services, taxed at 5% GST, while tax authorities classify them as goods, attracting a higher tax rate.

Legal Arguments

Representing MOD, tax expert Abhishek A Rastogi pointed to the provisions of the Central Goods and Services Tax (CGST) Act, stating that food supplied in restaurants and takeaways should be classified as services under Entry No. 6(a) of Schedule II. He cited GST notifications and government-issued circulars that confirm the 5% tax rate for restaurant services, including takeaway food.

Rastogi also raised concerns about the procedural validity of issuing a single show-cause notice covering multiple years and different GST registrations. He argued that tax authorities should issue separate notices for each assessment period rather than consolidating multiple years into one notice, as this could create compliance and legal challenges.

Implications for the Industry

If the Bombay High Court rules in favor of MOD, the decision could significantly impact how tax authorities classify food sales across the industry. A clear definition of composite supply under GST could simplify compliance for restaurants, bakeries, and takeaway businesses, reducing tax disputes and legal uncertainties.

The court has directed tax authorities to file their response by March 17, and the next hearing is scheduled for March 24, 2025. Until then, no coercive action will be taken against MOD regarding the disputed tax classification. The final ruling will determine whether MOD and similar businesses will be taxed as service providers or as sellers of goods.

Industry Reactions

The case has drawn attention from various stakeholders in the food and beverage industry. Restaurant and bakery owners believe the ruling will create uniformity in taxation and reduce legal complexities. Some experts argue that if MOD wins, similar businesses may also seek reclassification, potentially altering tax revenue collection patterns.

With the hearing set for March 24, industry players are closely watching the Bombay High Court’s decision, which could redefine the GST framework for the food and beverage sector in India.

The Central Goods and Services Tax (CGST) officers in India uncovered tax evasion amounting to ₹1.95 lakh crore in 25,397 cases during the period from April 2024 to January 2025. The Ministry of Finance revealed these figures, emphasizing the government’s strengthened crackdown on fraudulent activities through intelligence monitoring and digital tools like ‘Project Anveshan.’

According to Minister of State for Finance Pankaj Chaudhary, India has significantly ramped up its efforts to curb GST evasion. This includes tracking fraudulent registrations, monitoring suspicious e-way bill activities, and selecting high-risk taxpayers for audits and scrutiny.

Escalating GST Evasion Trends

The latest evasion figure marks a sharp increase compared to previous years. In 2022-23, authorities detected ₹1.32 lakh crore in evasion, while in 2021-22 and 2020-21, the figures stood at ₹73,238 crore and ₹49,384 crore, respectively. This rising trend has prompted the government to introduce stricter compliance measures.

Government Measures to Prevent Tax Evasion

To combat tax fraud, the government has taken several initiatives, including:

• ‘Project Anveshan’ – A system designed for early detection of fraudulent activities.
• AI-Based Monitoring – Identification of suspicious taxpayer behavior.
• Scrutiny of Returns – Selection of high-risk taxpayers for audits based on risk parameters.

Officials stated that efforts will continue to improve tax compliance and plug revenue leakages, ensuring a more transparent taxation system.