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GST Growth Claims Under Fire: Ex-Finance Chief Disputes Numbers
10 Sep
Summary
- Former finance secretary questioned government's GST growth figures.
- Central Board of Indirect Taxes rejects ex-official's claims.
- Dispute centers on exclusion of compensation cess from calculations.
A dispute has emerged regarding the government's reported Goods and Services Tax (GST) growth figures, with former finance secretary Subhash Chandra Garg publicly questioning the official claims. Garg argued that the headline numbers for August's gross GST collections and the first five months' growth were artificially inflated due to the exclusion of compensation cess collected in the prior year.
The Central Board of Indirect Taxes and Customs (CBIC) has strongly refuted Garg's assertions, labeling his methodology as "thoroughly misleading and mischievous." The CBIC clarified that compensation cess ceased to be collected from February 1, 2026, making year-on-year comparisons with its inclusion invalid. The board emphasized that monthly revenue statements separately disclosed compensation cess, and growth calculations were based on comparable tax bases.
Garg's calculations, which included compensation cess, suggested significantly lower growth rates for both gross and net GST revenue. The GST Council's decision to discontinue compensation cess, starting with most items on September 22, 2025, and later extending to tobacco products from February 1, 2026, is central to the differing interpretations of the revenue performance.
