Digital Payments and GST Revenue in India: An Exploratory Analysis of FY 2025–26

Abstract

This study looks at the connection between India's gross Goods and Services Tax (GST) revenue in FY 2025–2026 and Unified Payments Interface (UPI) activity. From April 2025 to March 2026, the analysis makes use of monthly data on gross GST collections, UPI transaction volume, and UPI transaction value. Simple linear regression, growth analysis, Pearson and Spearman correlations, and descriptive statistics are used.

According to the analysis, GST collections varied between months, but UPI activity increased over the study period. The study's 12-month dataset revealed a weak and statistically negligible correlation between UPI transaction value and gross GST revenue.  The regression model accounted for roughly 7.59 percent of the fluctuation in GST revenue, and Pearson's correlation coefficient was -0.2756. The idea that a larger UPI transaction value inevitably results in a higher monthly GST income is not supported by the data. However, given the study is based on only 12 months and does not account for economic activity, inflation, imports, changes in tax policy, or seasonal impacts, the results should be regarded as exploratory.