Uttar Pradesh's Goods and Services Tax (GST) collections reached an impressive Rs 10,000 crore in March, marking an 11-month high, according to government data released on Tuesday. The rise in collections was largely attributed to the massive attendance at the Mahakumbh in Prayagraj, which spurred economic activity and contributed significantly to the state's tax revenue.
Quarterly Trends: March Boosts Overall Collection
The March GST collection has had a positive impact on the average revenue for the January-March quarter, which was lifted by this strong performance. Despite record GST collections in April of the previous fiscal year pushing the average monthly collections over Rs 10,300 crore for the April-June quarter of FY25, the numbers saw a dip in the following quarters. The collections for July-September (Q2) and October-December (Q3) quarters stood at around Rs 8,400 crore and Rs 9,000 crore, respectively. However, in the final quarter (Q4) of FY25, the collections surged to over Rs 9,500 crore, indicating a solid recovery towards the end of the fiscal year.
Impact of the Mahakumbh on the State's Economy
According to tax experts, the Mahakumbh festival played a vital role in boosting Uttar Pradesh's economic activity. While the state had experienced single-digit growth in most months from July to December 2025, the festival brought about an average growth rate of 12.5% during the January-March period. However, experts caution that it remains to be seen whether Uttar Pradesh can maintain this growth momentum in the coming months after the event's conclusion.
Expert Opinion: GST Collection Boost Not Entirely Due to Kumbh
While the Rs 9,956 crore GST collection in March was marked by a solid 10% growth, tax experts like Sivakumar Ramjee, Executive Director-Indirect Tax at Nangia Andersen LLP, caution against attributing the entire rise to the Mahakumbh. According to Ramjee, while the event did lead to a spike in certain sectors, many of the Kumbh-related activities-such as small street vendors, food stalls, and religious offerings-are exempt from GST. Additionally, while sectors like tourism and hospitality saw a boost, they did not contribute enough to create a dramatic rise in tax revenue.
Ramjee also pointed out that other factors, like increased demand for fuel and alcohol, didn't significantly impact GST collections as those products are taxed at the state level and are outside the GST framework. In his view, the Mahakumbh's longer-term impact on infrastructure and tourism might prove more significant than the immediate tax boost seen during the festival.
Overall GST Growth in FY25
On a national level, overall GST collections for FY25 saw a significant increase, with March collections reaching Rs 1.96 lakh crore. This marks the second-highest collection on record and represents a growth of around 10% compared to March 2023, reflecting the overall health of the economy and the government's continued efforts to improve tax compliance and collection efficiency.
Conclusion
While Uttar Pradesh's GST collection surge in March is a welcome boost, particularly due to the Mahakumbh festival, experts suggest that the rise may not be as dramatic as it appears. The festival's short-term impact on tax collections may not be sustainable without continued economic activity and strategic investment in long-term growth sectors. However, the overall trend in GST collection across India shows a positive trajectory, with growth continuing into FY25.
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