GST collection growth mainly due to hike in input prices

Chennai : The drastic increase in raw material prices seems to have contributed to the jump in Goods and Services Tax (GST) collections in October 2021 than the real growth in the economy, an official of Consortium of Indian Associations (CIA) said.
CIA Convenor K. Raghunathan also said the committee set up by the Tamil Nadu government for the revival of micro, small, and medium enterprises (MSME) should come out with its report at the earliest.
“The GST collections in Oct 2021 should not be compared with the collections during the corresponding period last year as the nation was under lockdown. Even comparing the GST collections logged in Oct 2019 with that of October 2021, there may be much to crow about,” Raghunathan told IANS.
CIA is a consortium of about 70 industry bodies present across the country.
Raghunathan and another industrialist, not wanting to be identified, said there has been a huge increase in raw material prices during the last two years.
“In terms of the number of units produced, the quantum would be lower than the normal output. The hike in raw material prices is the reason for achieving high GST collections without any physical growth,” the Coimbatore-based industrialist told IANS.