Bihar GST Collection 2025 Records 23% Growth Surpassing National Average

The latest Bihar GST collection 2025 data is making headlines across India. Bihar has become the fastest growing state in GST performance showing a 23% growth in Goods and Services Tax (GST) revenue in May 2025 which is way higher than the national average of 16%. This is a good sign for a state like Bihar that is infamous for battling with multi-faceted poverty. It’s not just about the numbers, it’s a sign of economic progress.

Let’s dive into the details of Bihar GST Collection 2025 and Bihar’s economic growth. Use the following Table of Contents to navigate through this article as per your convenience :

Bihar’s GST Growth

The GST collection for Bihar in May 2025 was ₹1,871 crore compared to ₹1,521 crore last year. So this marks an overall growth of 23%, which is significantly higher than the national average growth of 16%.

This massive rise in the Bihar GST collection 2025 indicates increasing technological formalisation of the local businesses. It is more than just a better compliance rate.

Comparison with Other States

Although Bihar ranks in the growth percentage chart; it still lags behind in terms of total revenue collection when compared with other Indian states:

But inspite of lagging behind in total collection, we can witness the growth momentum in Bihar GST collection 2025. Bihar has seen a 23% rise while other states couldn’t match this.

For example Jharkhand saw a growth of 8%, West Bengal grew by 18% and Uttar Pradesh witness almost zero growth. This shows that Bihar is growing – infact thriving and if this continues at the same rate, Bihar will finally see the growth which it was always capable of. Bihar is currently one of the most poorest states in India, hopefully this doomed situation will finally change.

GST Registration & Compliance in Bihar

One of the most notable parts of the Bihar GST collection 2025 is the extent of participation from businesses. There are around 6.5 lakh GST-registered traders in Bihar which is relatively smaller considering the size of Bihar’s economy.

As per the GST rules, businesses which have an annual turnover below ₹20 lakh don’t need to register formally, so a large segment is left out of the tax net. But inspite of this, the compliance rate looks promising :

• 2.89 lakh returns were filed on the central GST server
• 3.63 lakh returns were filed on the state server

So, as we can see through the data that that the number of registered businesses may be limited but those who are registered are largely compliant. This becomes the driving factor behind the increase in Bihar GST collection 2025.

Bihar’s GST Growth For FY 2024–25

Bihar witnessed an annual growth rate of 6% which is one of the highest in India. The total GST collection in Bihar for the year 2024-25 was ₹29,359.76 crore whereas the same for FY 2023-24 was ₹27,622 crore. This indicates that Bihar’s improved economic performance isn’t limited to one month. It reflects consistent progress but the real achievement will lie in maintaining this positive growth rate.

Bihar’s Economy is Growing

Considering all the data, the growth in Bihar GST collection 2025 suggest the following trends :

1. Economic formalisation is increasing as more businesses are entering the tax system after registration.
2. Filing systems and return submissions have become faster and easier than before due to improve digital governance.
3. Bihar’s small scale service sector is expanding, people are not dependent on agriculture instead there opting for services and retail.
4. Bihar’s GST department has become more active due to which the administration and outreach is getting better.

All the above mentioned changes can be a result of recent infrastructural developments and government schemes. Bihar is receiving attention from National leadership including multiple visits from Prime Minister Modi in 2025. The present NDA government is a coalition between BJP and other local parties including JDU – that’s why Bihar is gaining the attention it deserved.

Challenges For Bihar

Despite the positive trends, Bihar has a long way to go as it still faces major structural challenges :

Bihar’s industrial base is comparatively smaller unlike major states like Gujarat or Maharashtra. Bihar has limited tax inflow because of its smaller manufacturing sector; Bihar’s economy is primarily dependent on agriculture.

Apart from this, Bihar lacks formally registered businesses i.e. it has a lower registration density than average – only 6.5 lakh businesses have been registered in a state of more than 12 crore people.

Bihar’s economy is dominated by unorganised sector. A vast majority of businesses are usually small traders that operate below the mandatory registration threshold.

For Bihar GST collection 2025 to turn into long-term economic strength, Bihar must focus on shifting its economy to the organised sector, improve business support infrastructure and broaden its tax base. This will help in increasing the GST collection as well as the per capita income.

Conclusion

The positive growth in Bihar GST collection 2025 is a significant milestone for Bihar as it is a rare moment where Bihar leads the nation in an economic indicator. A 23% growth rate looks promising but the significance lies in actually maintaining it so that Bihar doesn’t fall short in its economic development.

Bihar has seen better compliance to digital adoption and awareness. This indicates that the state is stepping into a new economic growth chapter. If the same continues with the right policy support, Bihar can finally witness its long awaited economic-transformation. All we can do is hope for the best for our state. We have covered the freight equalisation policy in detail which is one of the reasons of Bihar being one of the poorest states of India. You can access the detailed article here.

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