'Comparing apples and oranges': CBIC responds to Subhash Garg's claim on GST growth

The Central Board of Indirect Taxes and Customs (CBIC) on Wednesday rejected former Finance Secretary Subhash Chandra Garg's claim that the government had overstated GST growth by excluding compensation cess from its calculations.

Earlier today, Garg had questioned the government's reported 14.8% year-on-year growth in gross GST collections in August. He claimed that including GST compensation cess would bring five-month gross GST growth down to 4.08% and net growth to 1.30%.

"Gross GST of Rs. 2 trillion led Govt to claim growth of 14.8% in August & 11% in 5 months. Govt played a trick though. 2025-26 GST Cess has been quietly excluded. When included, 5 month gross GST growth becomes 4.08% and net 1.30%, a pathetic performance," Garg wrote on X.

CBIC rejected the allegation, saying compensation cess had already been discontinued.

Must Read: 'Sleight of the left hand to discredit GST numbers': SBI economist hits back at Garg’s 4% claim

Why Cess Was Excluded

CBIC said the GST Council decided to discontinue compensation cess from September 22, 2025, on all items except tobacco and related products. The cess on tobacco and related products was subsequently removed from February 1, 2026.

"Accordingly, from the above period, there is no cess collection," CBIC said.

The board said that from November 2025, the first tax period after GST rate rationalisation, published GST revenue figures showed compensation cess separately in a table.

It also said year-on-year growth was calculated using CGST, SGST and IGST for the corresponding periods. A footnote was included as an additional disclosure, CBIC said.

'Comparing Apples And Oranges'

CBIC said growth rates must be calculated using comparable tax bases.

"A growth rate is meaningful only when it is computed on a comparable basis, that is, on the same set of levies on both sides of the comparison. Otherwise, it is like comparing apples and oranges," it said.

The board said the purpose of a growth figure was to show how the tax base had moved. "The GST revenue figures published month on month reflect the correct picture of GST revenue performance, with full disclosure," it said.

"Where a levy has ceased to exist in law, retaining it in the base measures something else altogether. It is neither arithmetically right nor makes any logical sense."

CBIC said comparing figures from different tax bases was "thoroughly misleading and mischievous".

"A fair analysis must compare like with like, instead of misleading our citizens by comparing two fundamentally different datasets," it said.

GST Collections In August

Gross GST collections rose 14.8% year-on-year to about Rs 2 lakh crore in August.

GST revenue from domestic transactions rose 9.3% to more than Rs 1.37 lakh crore, while revenue from imports increased 29% to Rs 62,604 crore.

Gross Central GST collection stood at Rs 38,413 crore. State GST collection was Rs 46,316 crore, while Integrated GST collection was more than Rs 1.15 lakh crore.