July Sees Uptick, But UP’s GST Growth Stays Negative
Uttar Pradesh GST collection improved sharply in July 2025, clocking ₹10,767 crore, up from ₹9,643 crore in July 2024 — a healthy 11.64% year-on-year growth. However, this recovery masks a deeper issue: the state’s cumulative GST revenue for FY 2025 remains in the red, down –0.44% compared to the previous year.
MoSPI’s latest GSDP data showed UP among the top 3 fastest-growing state economies — so why is GST underperforming?
Key Highlights of UP’s GST Performance
| Month | GST Collection (₹ Crore) | YoY Growth |
|---|---|---|
| April 2025 | 10,356 | +2.3% |
| May 2025 | 9,874 | –1.1% |
| June 2025 | 9,456 | –7.6% |
| July 2025 | 10,767 | +11.64% |
- FY2025 so far: April–July collection at ₹40,453 crore
- FY2024 (same period): ₹40,633 crore
- Net difference: ₹–180 crore (–0.44%)
Why GST Growth is Still Negative?
Despite the July spike, these factors explain the FY dip:
- June 2025 slump: Major fall during June pulled down the overall average.
- Composition taxpayer transitions: Many MSMEs opted into or out of composition scheme post-amnesty period, affecting returns.
- Input tax credit backlog: Pending refunds or delayed GSTR-3B filings impact net inflow.
- Sector-specific volatility: Real estate, agro-processing, and textiles saw mixed output due to erratic monsoons.
GST Collection Rebound: What It Means for Businesses
Uttar Pradesh GST collection rebound is a positive sign — but don’t get comfortable. Here’s what taxpayers and consultants should monitor:
- Expect stricter scrutiny: With FY growth down, the state may intensify audits and DRC notices.
- Late return filers vulnerable: Authorities may target chronic GSTR-3B or GSTR-1 defaulters.
- Reverse charge and composition: Watch out for compliance checks under RCM and Section 10.
- Mismatch risk: Reconciliation of GSTR-2B with purchase ledgers critical in FY2025 to avoid penalties.
Government Clarification and Legal Basis
- Rule 88C and 142(1A) of CGST Rules — now actively enforced in cases of liability mismatch.
- Section 73 and 74 — being cited in SCNs for FY 2017–20 returns identified under Amnesty.
- CBIC’s analytics (via GSTN) has enhanced state-wise anomaly detection based on PAN-linked filing behaviour.
🔗 See Official GST Collection Data – PIB India
Expert Insight: Practical Tip for FY25
“Clients should now set up monthly reconciliation processes between GSTR-2B, purchase books, and e-invoices. The July rebound should not distract from FY-level scrutiny.”
— Efiletax Compliance Team
Closing Thoughts
The Uttar Pradesh GST collection rebound in July shows signs of economic traction, but FY 2025 still needs recovery. Businesses must step up compliance, especially in high-risk sectors.
Let Efiletax help you stay ahead of notices, mismatches, and composition scheme decisions.
👉 Get expert GST filing and advisory support – Efiletax.in
FAQ
Q1: Why is July GST collection high despite negative FY growth?
Because earlier months (esp. June) saw weak inflows, the July surge only offsets part of the deficit.
Q2: Will more audits come in UP now?
Possibly yes. With FY growth down, authorities may chase revenue via assessments and notices.
Q3: Should I opt for composition scheme in FY25?
Only if your turnover is under ₹1.5 crore and you serve end consumers with low input tax credits. Efiletax can guide case-by-case.
Summary
Uttar Pradesh GST collection rose by 11.64% in July 2025, but FY growth stays negative at –0.44%. Businesses must stay alert as audits may increase. Efiletax breaks down trends, compliance tips, and legal updates for UP taxpayers.