Center defends GST growth, says 14.8% estimate uses similar base | Today’s news
The Center is again defending the methodology behind the headline economic growth figure, this time for the collection of goods and services tax (GST), after former finance secretary Subhash Chandra Garg questioned the strength of the reported increase.
Gross GST collections rose 14.8% year-on-year in August, while cumulative collections rose 11% during April-August, according to government data released on September 1. But former Finance Secretary Subhash Chandra Garg, in a September 9 post on X, argued that the inclusion of compensatory charges collected in the previous year would reduce the five-month growth to 4.08%.
The core of the dispute is the comparable tax base. The Center excludes compensation from both periods as the levy is no longer in force, while Garg says its abolition is relevant to assess the overall change in GST-related revenue.
The Central Board of Indirect Taxes and Customs (CBIC) rejected Garg’s argument, terming attempts to compare two different tax bases as “thoroughly misleading and mischievous”. He said the GST growth should be calculated using the same set of charges in both periods.
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The comments came after August GST collections rose 14.8% year-on-year. ₹1.99 trillion, while the cumulative collection during April-August rose by 11% to ₹10.43 trillion.
Garg estimated that the inclusion of the cess collected in the previous period would reduce comparable gross GST growth to 7.51% in August and 4.08% in the first five months. He also calculated net income growth at 1.3%.
CBIC said the reported growth rate transparently discloses the compensation process separately. The board said the year-on-year comparison uses Central Goods and Services Tax (CGST), State Goods and Services Tax (SGST) and Integrated Goods and Services Tax (IGST) for both periods.
“The rate of growth is meaningful only when calculated on a comparable basis, that is, on the same set of charges on both sides of the comparison. Otherwise, it is like comparing apples and oranges,” CBIC said in its September 9 X post.
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What compares?
The distinction is relevant because the compensatory cess was still levied during the previous year period but was subsequently withdrawn.
The September 2025 GST Council decision brought into force the revised GST rates on most goods from 22 September 2025, while the compensatory cess on specific tobacco and pan-masala products was subsequently abolished from 1 February 2026.
According to government data, gross GST revenue of Rs ₹1.99 trillion in August included CGST ₹38,413 crore, SGST of ₹46,316 crore and IGST of ₹1.15 trillion. Gross domestic income rose by 9.3%, while GST on imports rose by 29%.
A former Indian Revenue Service (IRS) official agreed with CBIC’s stand and said the 11% figure is a similar comparison to the GST components that continue to exist.
“The ₹1.998 trillion for August 2026 inclusive of CGST, SGST and IGST, net of offsets. This is an increase of 14.8%. ₹1.741 trillion in August 2025. In April-August 2025, the compensatory cess was still collected, but the corresponding ₹9.40 trillion base does not include this cess. Therefore, the 11% growth for April-August 2026 is a similar comparison to the GST components that continue to exist,” Sanjay Kumar, a former IRS officer, told Mint.
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But Kumar said the disappearance of the cess remains relevant when assessing the government’s total GST-related revenue.
“Garg’s calculation adds the 2025 compensatory tax back to the base, which naturally sharply reduces the five-month growth to its 4.08%. CBIC is right on the narrow statistical point. If the relief has ceased to exist, comparing the current GST with last year’s GST including the tax that no longer exists is not comparable in terms of total revenue, but it is also a legitimate point of revenue analysis. increased, the disappearance of more than ₹60,000 million ces from the tax base is economically relevant and should not simply disappear from the discussion,” he said.
“To call it a ‘gimmick’ is too strong, but to present 11% as evidence of the underlying buoyancy of the GST without showing the effect of withdrawal for reason is also incomplete,” he said.
