The big data debate: After GDP row, Garg, finance ministry lock horns on GST numbers

The GDP data debate has now reached the doorsteps of GST. Former economic affairs secretary Subhash Chandra Garg, who whipped up a storm by claiming that "real GDP" growth in Q1FY27, is just 2.6% and not 7.8%, has made fresh claims saying GST revenue growth has remained subdued.

This has evoked a sharp response from the ministry of finance.

What is Garg's calculation on GST?

“Gross GST of Rs. 2 trillion led government to claim growth of 14.8% in August and 11% in 5 months. Government played a trick though. 2025-26 GST Cess has been quietly excluded. When included, 5-month gross GST growth becomes 4.08% and net 1.30%, a pathetic performance,” Garg said in a post on X earlier today.

India’s gross Goods and Services Tax (GST) collections rose 14.8% year-on-year to ₹1,99,853 crore in August, according to official data released on September 1.

How did the govt defend the GST revenue growth data?

The ministry of finance, meanwhile, said comparing this year’s numbers with last year’s cess-included numbers is akin to comparing apples with oranges.

Responding to Garg’s claims, the Central Board of Excise and Customs today said that with the GST Council’s decision last year to discontinue compensation cess beginning September 22, last year on all items except tobacco and related products, and subsequently on tobacco and related products from February 1 this year, there is no cess collection from that period.

“In view of the above, from the month of November 2025 (first tax period post GST rate rationalisation), GST revenue figures published in the public domain transparently showed compensation cess separately in a table below and the year-on-year growth was computed on the tax base consisting of CGST, SGST and IGST for the corresponding periods. A foot note was also carried as an ample disclosure,” it said.

“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,” it added.

“The purpose of a growth figure is to show how the tax base has moved. The GST revenue figures published month on month reflect the correct picture of GST revenue performance, with full disclosure. 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,” it said in the clarification.