The Central Board of Indirect Taxes and Customs (CBIC) has defended its 14.8% GST growth figure for August, rejecting claims that the data was inflated. The agency clarified that excluding the discontinued compensation cess is necessary for an accurate year-on-year comparison, dismissing criticism that the methodology masked an economic slowdown.
The Central Board of Indirect Taxes and Customs (CBIC) has formally rebutted allegations that its latest GST revenue growth figures are misleading. The controversy arose following reports that August GST collections rose by 14.8 percent to Rs 1,99,853 crore compared to the previous year. This reported growth was challenged by former Finance and Economic Affairs Secretary Subhash Chandra Garg, who argued that the government’s calculation methodology artificially inflated the numbers by excluding the GST compensation cess from the base year calculation.
Subhash Chandra Garg contended that when the compensation cess—which was previously part of the revenue structure—is included in the base calculation, the actual growth rate over the five-month period drops significantly to 4.08 percent. This argument suggests that the government is masking a broader slowdown in tax revenue by shifting the accounting framework.
The CBIC responded by stating that such a comparison is arithmetically invalid. The board explained that the compensation cess was discontinued for most goods as of September 2025 and was completely removed from tobacco products by February 2026. Because this levy no longer exists under the current tax regime, the board maintains that including it in a year-on-year analysis creates a distorted picture. According to the CBIC, using a constant tax base is the only way to perform an accurate, like-for-like comparison of tax performance.
This dispute highlights the ongoing scrutiny surrounding India's official economic indicators. In recent months, various observers have raised questions regarding the transparency and calculation methods of GDP and quarterly growth reports. The CBIC emphasized that the practice of displaying non-cess revenue has been transparently disclosed in its monthly reports since November 2025, aiming to reassure stakeholders that the methodology aligns with the structural changes in the tax system.
The debate over how economic data is presented continues to be a focal point for analysts monitoring domestic fiscal health. Investors typically track these discussions because the methodology used to calculate tax revenue can influence perceptions of economic momentum. Moving forward, the market will likely monitor further monthly GST updates and any additional clarifications from fiscal authorities regarding how the government plans to maintain data consistency as the tax base continues to evolve without the compensation cess.