Congress Criticises PM Modi for Claiming Sole Ownership of GST Amendments and Inadequate Reforms

The Congress party has accused Prime Minister Narendra Modi of taking sole ownership of GST amendments while highlighting unresolved issues and inadequate reforms. They demand an extension of compensation for states and criticise the government's handling of essential item taxation.

The Congress party has criticised Prime Minister Narendra Modi for claiming sole credit for changes to the GST system. They argue that these reforms are insufficient, leaving issues like states' demands for extended compensation unresolved. The opposition likened the reforms to a temporary fix, urging the government to apologise for taxing essential goods.

On the eve of reduced GST rates, Modi advocated for swadeshi products, stating that upcoming GST reforms would boost India's growth and attract investors. He announced a "GST bachat utsav" or savings festival starting from Navratri's first day, promising it as a double benefit alongside income tax exemptions.

Congress Criticises GST Reforms

Congress president Mallikarjun Kharge criticised Modi using a Hindi proverb, accusing him of imposing a complex tax system. "Narendra Modi ji, instead of the simple and efficient GST of the Congress party, your government imposed the Gabbar Singh Tax by collecting 9 different slabs and collected over Rs 55 lakh crore in eight years. Now you are talking about a Rs 2.5 lakh crore savings festival and applying a simple band-aid after inflicting deep wounds on the public!" Kharge said in a post in Hindi on X.

Kharge further stated that people will not forget the GST on essentials like pulses, rice, and medical treatment. He demanded an apology from the government for these taxes. Congress general secretary Jairam Ramesh echoed this sentiment, accusing Modi of claiming sole ownership of GST amendments made by the constitutional GST Council.

Concerns Over Current GST Structure

Ramesh described GST as a "Growth Suppressing Tax," citing its numerous tax brackets and high rates on mass consumption items. He highlighted issues like evasion, misclassification, compliance costs, and an inverted duty structure. "We have been demanding a GST 2.0 since July 2017 itself. This was a key pledge made in our Nyay Patra for the 2024 Lok Sabha Elections," he said.

Ramesh also pointed out unresolved issues affecting MSMEs and called for procedural changes and increased thresholds for interstate supplies. He noted sectoral challenges in textiles, tourism, handicrafts, and agriculture that need addressing.

State-Level GST and Compensation Concerns

The Congress leader suggested incentivising states to implement state-level GST covering electricity, alcohol, petroleum, and real estate. He emphasised states' demand for extending compensation to protect their revenues as part of cooperative federalism.

Ramesh questioned whether delayed GST changes would truly boost private investment needed for GDP growth. He highlighted India's trade deficit with China doubling over five years to exceed USD 100 billion.

Impact on Key Sectors

K C Venugopal from Congress criticised Modi's address as an attempt to claim credit for overdue actions that only alleviate past hardships on India's poor and middle classes. "It would have been fitting if he also apologised for the trauma he inflicted on the people from 2017 to 2025," Venugopal said.

Venugopal reiterated Congress's call for a single low-rate tax instead of the current multi-tier system. He advocated easing filing procedures burdening MSMEs and extending compensation cess for states to ensure fair GST shares.

Upcoming Changes in GST Rates

The new tax regime introduces a two-tier structure with most goods taxed at 5% or 18%, while luxury items face a 40% tax. Tobacco products remain taxed at 28% plus cess. Previously, four slabs existed: 5%, 12%, 18%, and 28%, with additional cess on luxury and sin goods.

From September 22, reduced GST rates will make various goods cheaper, including kitchen staples like ghee and paneer, as well as aspirational items like TVs and washing machines.

With inputs from PTI