The Central Board of Indirect Taxes and Customs (CBIC) safeguarded the method utlised to compute the GST growth, citing that the discontinued compensation cess cannot be kept in the comparison base and accusing attempts to merge different tax bases of being “misleading and mischievous”.
The clarification has arrived in answer to an assertion that the government’s reported GST growth for August and the first 5 months of the fiscal year was overstated by excluding compensation cess from the 2025-26 base.
As per CBIC, the GST Council had determined to stop compensation cess from September 22, 2025, and pertinent products were deleted from February 1, 2026. It stated, “Accordingly, from the above period, there is no cess collection.” The Board stated that in the GST revenue data released in the public domain, the compensation cess has been shown separately in a table since November 2025, whereas year-on-year growth has been calculated using CGST, SGST, and IGST for the respective period.
“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 expressed, adding that otherwise it was “like comparing apples and oranges”.
The CBIC stated that the growth rate was intended to show how the underlying tax base has evolved, and that the monthly GST revenue figures, along with comprehensive details, present an accurate picture of GST revenue performance.
“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 mentioned.
The reply has arrived after former Finance Secretary Subhash Chandra Garg, in a post on X, showed that gross GST of Rs 2 trillion had led the government to disclose 14.8% growth in August and 11% growth over 5 months. Garg alleged that including last year’s compensation cess would reduce the gross GST growth for the five months to 4.08 percent and the net growth to 1.30 percent.
1.The GST Council took a decision to discontinue the compensation cess effective from September 22, 2025 on all items except tobacco and related products. The cess levy on tobacco and related products was also removed from February 1, 2026. Accordingly, from the above period,… https://t.co/Ojo532dijH
— CBIC (@cbic_india) September 9, 2026
CBIC does not accept these comparisons, citing that numbers from two distinct tax bases must not be merged.
It is misleading and mischievous to cherry-pick numbers from two distinct tax bases.
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The board outlined that subsequent assessments of GST performance must compare equivalent things using the same set of applicable levies for both periods.
