Punjab’s GST Collection Sees 22% Growth in H1 FY25-26 Despite Challenges
Punjab Finance Minister Harpal Singh Cheema announced that the state’s gross goods and sales tax (GST) collections reached Rs 13,971 crore during the first half of the financial year (April-September), marking a 22.35% growth compared to the same period last year.
Overcoming Adversities
Despite facing a war-like situation in May 2025 that disrupted business and trade, and additional hurdles from the tariff impact on exports, and weak consumer demand that slowed down retail transactions during mid-August and September, Punjab’s GST collection saw a significant increase.
According to Cheema, the state recorded a gross GST revenue growth of Rs 2,553 crore compared to the corresponding period last year. The state’s year-on-year GST growth rate rose from 5% in the first half of FY 2024-25 to 22.35% in FY 2025-26, exceeding the national GST growth rate of around 6%.
Other Indirect Tax Categories
In addition to GST, Punjab also showed encouraging results in other indirect tax categories. Collections under VAT and CST increased by 10%, while the Punjab state development tax (PSDT) registered a growth of 11% during September 2025 compared to the same month last year.
The finance minister attributed the state’s performance to its resilience and enforcement actions against tax evasion. The taxation department blocked Rs 246 crore of ineligible input tax credit (ITC) across 1,162 taxpayers and lodged four major FIRs against fraudulent networks, including scams of Rs 500 crore in Ludhiana and Rs 550 crore in Fatehgarh.
Enforcement Actions
Penalty collections from road checking and inspections by the State Intelligence and Preventive Units (SIPUs) surged sharply, rising from Rs 106.36 crore in April-September 2024 to Rs 355.72 crore in April-September 2025. This increase of Rs 249.36 crore reflects a remarkable 134% growth in enforcement-driven collections.
The minister said that Punjab’s performance had proven to be better than the national average. While most other states recorded negative growth trends in September 2025, Punjab continued to show resilience and reported double-digit growth. In September 2025 alone, the state collected Rs 2,140.8 crore, up from Rs 1,943 crore in September 2024, marking an increase of Rs 197.82 crore and a growth rate of 10%.
Impact on Indian Economy
The growth in GST collection is a positive sign for the Indian economy, indicating a recovery in consumer demand and business activity. The increase in tax revenue will also help the government to fund its development projects and social welfare schemes.
However, the challenges faced by Punjab, including the war-like situation and tariff impact on exports, are a concern for the Indian economy as a whole. The government needs to take measures to address these challenges and ensure that the economy continues to grow at a steady pace.
Conclusion
In conclusion, Punjab’s GST collection has seen a significant growth in the first half of FY25-26, despite facing several challenges. The state’s resilience and enforcement actions against tax evasion have contributed to this growth. The increase in tax revenue is a positive sign for the Indian economy, but the government needs to address the challenges faced by the state to ensure continued growth.
