CBIC rejected claims that recent GST growth figures were overstated.
The dispute concerns excluding the discontinued compensation cess from earlier comparisons.
Subhash Chandra Garg said including cess would sharply reduce reported growth.
The Central Board of Indirect Taxes and Customs (CBIC) on Wednesday defended the methodology used to calculate GST growth, after former finance secretary Subhash Chandra Garg questioned the strength of the reported 14.8% increase.
CBIC said year-on-year growth must be measured using the same levies for both periods and including a tax that no longer exists in one side of the comparison would distort the underlying trend, news agency ANI reported.
“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,” CBIC said, describing comparisons involving unequal tax components as “like comparing apples and oranges”.
The dispute arose after Garg questioned the government’s reported GST growth for August and the first five months of the financial year. In a post on X, he said gross GST collections of ₹2 trillion had allowed the government to report year-on-year growth of 14.8% for August and 11% for the five-month period.
Garg claimed that if compensation cess collected during the corresponding period of 2025-26 were included in the base, gross GST growth for the five months would fall to 4.08%, while net growth would decline to 1.30%, as reported by ANI.
CBIC disputed that approach, pointing to the phased withdrawal of the cess. According to the board, the GST Council discontinued compensation cess on all products except tobacco and related goods from September 22, 2025. The remaining cess on tobacco products ended on February 1, 2026.
“Accordingly, from the above period, there is no cess collection,” CBIC said.
The board said its public GST revenue statements have separately reported compensation cess since November 2025. It added that year-on-year growth rates compare revenue from Central GST, State GST and Integrated GST during the relevant periods.
CBIC maintained that growth calculations should show changes in the continuing GST base instead of including revenue from a levy that has been removed.
“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,” the board said.
The tax authority also rejected the suggestion that excluding the cess concealed the actual performance of GST collections. It said the monthly revenue statements provide complete disclosure of collections while ensuring that growth rates use comparable tax components.
“Any attempt to cherry-pick figures from two different tax bases is thoroughly misleading and mischievous,” CBIC said.
