The government has pushed back against criticism of its GST revenue growth calculations, saying comparisons must be made on a like-for-like basis and not across different tax bases.
The Central Board of Indirect Taxes and Customs (CBIC) said the GST Council had decided to discontinue the compensation cess from September 22, 2025, on all items except tobacco and related products. The cess on tobacco and related products was subsequently removed from February 1, 2026.
“As from the above period, there is no cess collection,” CBIC said in a post on X.
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The clarification came in response to a commentary by former Finance and Economic Affairs Secretary Subhash Chandra Garg in a daily English newspaper, which questioned the government's assessment of GST growth.
Garg said the government had used gross GST collections of around Rs 2 trillion to claim growth of 14.8% in August and 11% over five months. He alleged that “2025-26 GST Cess has been quietly excluded”, arguing that including the cess would bring five-month gross GST growth down to 4.08% and net growth to 1.30%.
CBIC, however, rejected the suggestion that the cess had been excluded from the calculations.
According to the tax authority, GST revenue figures published from November 2025, the first tax period after GST rate rationalisation — separately disclosed compensation cess in the public-domain data. The year-on-year growth calculation was based on CGST, SGST and IGST for the corresponding periods, with a footnote providing additional disclosure.
The government said a growth rate is meaningful only when the same set of levies is compared on both sides.
“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,” CBIC said.
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The tax authority argued that the purpose of a growth number is to show how the underlying tax base has changed. Once a levy has ceased to exist, retaining it in the comparison base would distort the calculation rather than provide a meaningful measure of GST performance.
CBIC also accused critics of cherry-picking figures from two different tax bases, calling such comparisons thoroughly misleading and mischievous.
The government maintained that the monthly GST revenue numbers provide a transparent picture of revenue performance, with the relevant cess figures disclosed separately where applicable.
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