4 hrs ago
Centre Defends GST Growth Figures Amid Base Comparison Dispute
India’s government reported that GST tax collections grew strongly in August and during the first five months of the period.
The government counted only taxes that still exist today in both years.
Former finance secretary Subhash Chandra Garg said this leaves out an old compensation cess that was collected last year.
Including that cess makes the growth numbers much smaller.
The Central Board of Indirect Taxes and Customs said using different tax bases would be misleading.
It said a fair comparison must use the same taxes in both years.
A former tax official agreed with the government’s statistical method.
He also said the lost cess still matters when looking at total GST-related revenue.
Gross GST collections rose 14.8% year-on-year to ₹1.99 trillion in August.
Cumulative GST collections increased 11% to ₹10.43 trillion during April-August.
Former finance secretary Subhash Chandra Garg said including compensation cess lowered growth to 7.51% in August and 4.08% over five months.
The Central Board of Indirect Taxes and Customs said growth must compare the same levies in both periods.
A former tax official said the Centre’s calculation is statistically comparable, but the discontinued cess remains economically relevant.
- Who
- The Central Board of Indirect Taxes and Customs, former finance secretary Subhash Chandra Garg, and former Indian Revenue Service official Sanjay Kumar are central to the dispute.
- What
- They disagree over whether GST growth should exclude or include compensation cess collected in the year-earlier period.
- Where
- The dispute concerns India’s GST revenue data and was discussed through posts on X.
- When
- The government released the August data on 1 September, while the criticism and CBIC response were posted on 9 September.
- Why
- The compensation cess was collected in the earlier period but was later withdrawn, creating disagreement over the appropriate comparison base.
Include Compensation Cess
Use Like-for-Like Levies
Appropriate growth measure
Include Compensation Cess
Subhash Chandra Garg argues that compensation cess collected in the year-earlier period should be included to assess the overall change in GST-related revenue.
Use Like-for-Like Levies
The Central Board of Indirect Taxes and Customs says growth is meaningful only when the same set of levies is compared in both periods.
Reported growth figures
Include Compensation Cess
Garg calculated growth of 7.51% for August and 4.08% for April-August after adding the earlier-period cess to the comparison base; he also calculated net revenue growth of 1.3%.
Use Like-for-Like Levies
The Centre reports 14.8% August growth and 11% growth for April-August using CGST, SGST and IGST in both periods, excluding compensation cess.
Economic relevance of cess withdrawal
Include Compensation Cess
The former IRS official cited in the report said the disappearance of more than ₹60,000 crore in cess remains relevant to understanding total GST-related revenue.
Use Like-for-Like Levies
CBIC maintains that including a levy that no longer exists would compare different tax bases and be misleading.
Key facts
- August gross GST collections
- ₹1.99 trillion
- August year-on-year growth
- 14.8%
- April-August gross collections
- ₹10.43 trillion
- April-August reported growth
- 11%
- Garg’s adjusted five-month growth
- 4.08% when earlier-period compensation cess is included
- August GST composition
- CGST ₹38,413 crore, SGST ₹46,316 crore and IGST ₹1.15 trillion
- Other revenue changes
- Domestic GST revenue rose 9.3%, while GST from imports rose 29%
Quotes
Central Board of Indirect Taxes and Customs
India’s indirect tax administration body
“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”
livemint.com
Sanjay Kumar
Retired Indian Revenue Service officer
“The ₹1.998 trillion August 2026 figure comprises CGST, SGST and IGST, excluding compensation cess. It is up 14.8% from ₹1.741 trillion in August 2025.”
livemint.com
Sources
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