The Central Board of Indirect Taxes and Customs (CBIC) has strongly refuted claims made by former Finance Secretary Subhash Chandra Garg, who alleged that the government had inflated reported Goods and Services Tax (GST) collection growth figures. Garg's assertion, made public on September 9, 2026, questioned the reported 14.8% year-on-year growth in gross GST collections for August, arguing that the exclusion of compensation cess presented a misleading picture.
According to Garg, incorporating the GST compensation cess into calculations would drastically reduce the five-month gross GST growth to a mere 4.08% and net growth to 1.30%. He criticized the government for what he termed a "trick," suggesting the quiet exclusion of the 2025-26 GST Cess skewed the performance metrics.
CBIC Clarifies Cess Discontinuation
In response, the CBIC rejected these allegations, clarifying that the compensation cess had been officially discontinued. The board pointed out that the GST Council had decided to cease the compensation cess from September 22, 2025, for most items, with tobacco and related products following suit on February 1, 2026. Therefore, no cess collections have occurred since these dates.
"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," the CBIC stated. The board emphasized that comparing figures from different tax bases is "thoroughly misleading and mischievous," urging for a fair analysis that compares "like with like."
Accurate Reflection of GST Revenue
The CBIC maintained that the monthly published GST revenue figures accurately reflect the performance of GST revenue, providing full disclosure. It highlighted that from November 2025, following GST rate rationalization, compensation cess figures were shown separately in published tables. Furthermore, year-on-year growth calculations consistently use Central GST (CGST), State GST (SGST), and Integrated GST (IGST) for corresponding periods, with additional disclosures provided in footnotes.
For August 2026, gross GST collections reached approximately Rs 2 lakh crore, marking a 14.8% increase compared to the previous year. Revenue from domestic transactions grew by 9.3% to over Rs 1.37 lakh crore, while import revenue saw a significant 29% surge to Rs 62,604 crore. The collection breakdown showed Central GST at Rs 38,413 crore, State GST at Rs 46,316 crore, and Integrated GST exceeding Rs 1.15 lakh crore.