Even as the controversy surrounding India’s GDP data remains unsettled, accusations are being raised against the authenticity of GST collections. The monthly indirect tax haul is growing in healthy double-digits, outpacing nominal GDP growth. However, former Finance Secretary Subash Chandra Garg has levelled fresh allegation that the net GST collection—stripping out tax credits and refunds—was registering lower growth than the nominal GDP. Moreover, by his calculations, if we exclude GST compensation cess, which was discontinued in September 2025, the overall growth in tax collection would remain sub-par.
The Central Board of Indirect Taxes and Customs was quick to dismiss Garg’s allegations as misleading and mischievous for cherry-picking figures from two different tax bases and raising suspicion when there’s none. Further, it argued that it has been transparently publishing data pertaining to compensation cess in separate tables, with detailed disclosures. Garg countered that the increasing tendency to manage data to suit narratives is unfortunate.
Comparing current revenue against past data with discontinued levies and calling the difference a statistical trickery is a classic accounting mistake. Even if Garg rejects the government’s claim about double-digit expansion in monthly GST revenue as a sign of robust economic activity, it’s undeniable that the money is flowing to the exchequer. There is simply no merit for the government to inflate tax revenue data and complicate its income and expenditure budget. Moreover, the annual growth in both gross and net GST collections is below nominal GDP growth. For instance, in 2025-26, gross collections at ₹22.27 lakh crore saw 8.3 percent growth, while net proceeds at ₹19.34 lakh crore registered a 7.1 percent increase. These are actual monies collected and refunded, and tax officials have no benefit in reporting otherwise.
The allegations have come close to next month’s GST Council meeting. At this, the council’s first huddle since the major rate rationalisation exercise last year, it must speed up work on simplifying refunds and speeding up registrations. One focus should be preventing fake input tax credit claims, which are alarmingly rising. In 2025-26 alone, authorities detected 30,000-odd such cases worth ₹74,782 crore. Fake invoicing and fraudulent claims lead to significant revenue leakage. Hence, it’s essential for the government to strengthen fraud detection and prevent such claims.
