Karnataka GST Revenue Crosses ₹1.6 Lakh Crore in FY25
Karnataka GST revenue crossed ₹1.6 lakh crore in FY 2024–25, making it the second highest GST contributor in India after Maharashtra. The state’s tax base is expanding steadily, with robust IT exports, manufacturing, and a strong services sector driving consistent collections.
Key Highlights: Karnataka’s GST Growth
- Total Revenue (FY25): ₹1.60 lakh crore
- Rank: 2nd highest in India (after Maharashtra)
- Contributors: IT sector, FMCG, e-commerce, real estate
- Year-on-Year Growth: Double-digit increase over FY24
- Monthly Average Collection: Over ₹13,300 crore
Source: PIB GST Revenue Report, June 2025
Visit official GST collections page →
What Fuels Karnataka’s High GST Revenue?
1. Strong Domestic Consumption
Bengaluru’s urban economy drives high B2C GST, especially on retail, food services, electronics, and entertainment.
2. IT & Digital Exports
Exports of services attract zero-rated GST, but the refund cycle keeps Karnataka’s GST input credit ecosystem active. Companies file more returns, increasing the GSTN compliance footprint.
3. Real Estate and Commercial Leasing
GST @18% on commercial property rentals and input services in urban projects adds significantly to monthly inflows.
4. Manufacturing in Electronics, Auto & Pharma
Hubli, Mysuru, Dharwad, and other cities have seen GST collections rise from industrial activity and PLI scheme impact.
Legal Insight: Inter-State Supply Boosts Karnataka’s IGST
Under Section 7 of the IGST Act, supply from Karnataka to other states (B2B and B2C) is treated as inter-state supply, levied with IGST. Karnataka also receives settled IGST from the Centre, boosting overall revenue figures.
📌 CBIC Insight: States with strong outbound supplies often show higher net GST due to regular IGST settlements.
How Karnataka Compares With Other States (FY 2024–25)
| State | GST Revenue (₹ Cr) | Rank |
|---|---|---|
| Maharashtra | 2,09,000 | 1 |
| Karnataka | 1,60,000 | 2 |
| Gujarat | 1,40,000 | 3 |
| Tamil Nadu | 1,30,000 | 4 |
| Uttar Pradesh | 1,05,000 | 5 |
Note: All figures are estimates as per CBIC and state commercial tax departments.
Expert View: Karnataka’s GST Collections Reflect High Voluntary Compliance
According to senior GST practitioners in Bengaluru, Karnataka shows one of the highest percentages of voluntary return filings under GSTR-3B and GSTR-1. This not only reflects better awareness but also smoother refund and credit mechanisms.
Pro Tip:
Businesses operating in Karnataka should take advantage of faster input tax credit processing and less scrutiny-driven audits, thanks to the state’s clean compliance track record.
Why This Matters for Taxpayers
If you’re a GST-registered business in Karnataka:
- Stay consistent with monthly filings to avoid late fees under Section 47 of the CGST Act.
- Use the auto-drafted GSTR-2B to claim accurate ITC.
- Track IGST credits and settlements if dealing in inter-state supplies.
Internal Resource
🔗 Read our blog on Top GST Return Filing Mistakes to Avoid →
FAQs
Q1. Why does Karnataka collect more GST than other southern states?
Karnataka has a massive base in IT, real estate, digital commerce, and auto sectors — all highly taxed and well-compliant segments.
Q2. Is Karnataka eligible for GST compensation now?
No. The GST compensation period ended in June 2022. States now rely solely on GSTN data and settlement formulas.
Q3. How does inter-state trade affect Karnataka’s GST?
Karnataka supplies services across India. IGST levied on these is later settled back to the originating state, boosting its revenue.
Summary
Karnataka GST revenue hits ₹1.6 lakh crore in FY25, ranking second in India. IT services, real estate, and inter-state trade are key contributors.
Final Note
Karnataka’s GST performance shows what good compliance and strong sectoral diversity can achieve. If you’re a business based in the state, Efiletax can help streamline your GST filings, refunds, and notices — without delays.