Congress: PM Modi Finally Admits GST Was Broken
Congress says flawed GST 1.0 vindicates its criticism.
The Congress party declared on Monday that its long-standing criticism of the "flawed" Goods and Services Tax (GST) has been vindicated, following Prime Minister Narendra Modi's announcement of a simplified GST structure.
Jairam Ramesh, Congress general secretary for communications, stated that the economy has yet to recover from the "twin Modi-inflicted shocks" of GST 1.0 and demonetisation. "The Vijay Kelkar Committee report of 2004, which inspired the GST announcement in P. Chidambaram’s 2006 Budget Speech, laid the groundwork for a reformed GST 2.0," Ramesh posted on X.
"The Indian National Congress stands vindicated on its critique of the flawed GST 1.0, implemented on July 1, 2017, which delivered a severe blow to the economy after demonetisation on November 8, 2016," he added, echoing Congress leader Rahul Gandhi’s term for GST as the "Gabbar Singh Tax."
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On Sunday, Modi revealed that the Centre has shared a draft of next-generation GST reforms with states, urging their cooperation to implement the changes before Diwali. He emphasized that the reforms would benefit the poor, middle class, and businesses alike, as announced in his Independence Day speech on August 15.
The proposed reforms will replace the current GST tax slabs—nil/zero on essentials, 5% on daily use items, 12% on standard goods, 18% on electronics and services, and 28% on luxury and sin goods—with a streamlined two-slab system of 5% and 18%, plus a 40% bracket for 5-7 demerit goods. If approved by the GST Council, this will eliminate the 12% and 28% slabs.
Developed over six months of deliberations and numerous meetings, the new structure aims to minimize demands for tax adjustments and prevent input tax credit (ITC) accumulation, ensuring a more efficient system.
Also Read: Congress Demands GST 2.0 to Fix Broken Tax System
