It is ironic that rising inflation may add to the hardships of the common people. But this leads to higher GST recovery. Hence GST is charged as a percentage of the price of a good or service.
In October, the collection of GST reached one lakh 52 thousand crores. At a time when the pockets of the rest of the country’s population, barring a few corporate houses, are getting lighter, the increasing revenue of the government undoubtedly draws attention. The advocates of the present government will once again tell this recovery as the result of prosperity in the country’s economy. But the truth may not be so. Although the full details of the areas in which tax collection increased, have not been released yet, but some things have come to the fore. For example, there has been an increase of 18 percent in the revenue from transactions done in the country, which also includes increased revenue from imports. Imports have become expensive. Even within the country, normal transactions have become expensive due to the high rate of inflation. It is ironic that rising inflation may add to the hardships of the common people, but it leads to higher recovery of GST. Hence GST is charged as a percentage of the price of a good or service. Similarly, if imports become expensive, tax collection will also increase along with it.
GST has formalized the tax collection process. So anyway, many transactions which used to be outside the tax net are now under its ambit. So tax collection from them increases, but it does not mean that the number of transactions has actually increased. Then the figures that are released are of recovery. That is, the details of how much amount will be refunded, it is not known immediately. Therefore, increasing the collection of GST creates a misleading impression. The real story are reports from companies producing consumer content. From general oil-soap makers to two-wheeler and entry-level car makers, sales figures have been disappointing even in October, when it was the month of Diwali. In fact, it would have been a matter of happiness for the countrymen if the realization of GST would increase due to the strengthening of the economic base. But now the real face is not like this.