Congress Questions Whether GST Reduction Benefits Will Reach Consumers

As reduced Goods and Services Tax (GST) rates on items ranging from kitchen staples to electronics took effect on Monday—the first day of Navratri—the Congress party criticized the reforms as "limited" and long overdue. General Secretary Jairam Ramesh described the changes as arriving eight years too late, labeling them "GST 1.5" rather than the comprehensive "GST 2.0" the party has demanded since 2017. He raised concerns over procedural complexities that remain unaddressed and warned of a "big question mark" on whether tax reductions will translate into lower consumer prices, accusing the government of potential "vote chori" (vote theft) alongside "munafakhori" (profiteering).

Ramesh highlighted the National Anti-Profiteering Authority (NAA), established under Section 171 of the Central Goods and Services Tax Act, 2017, to ensure rate cuts benefit consumers. However, he claimed the Narendra Modi government rendered it "toothless" via a September 30, 2024, notification, undermining its enforcement powers. In an interview with PTI, Ramesh recalled the Congress's early opposition to GST's rollout, dubbing it the "Gabbar Singh Tax" for its punitive structure—a critique dismissed at the time by the BJP. He noted Modi's own resistance as Gujarat chief minister from 2006 to 2014 and suggested external pressures, like U.S. tariffs under President Donald Trump, may have prompted the tweaks. The party reiterated its 2024 Lok Sabha manifesto pledge for GST 2.0, emphasizing relief for micro, small, and medium enterprises (MSMEs), which employ millions.

The reforms, announced by Prime Minister Modi in a Sunday address, simplify GST into a two-tier structure—primarily 5% and 18% slabs—with 40% on ultra-luxury items and 28% plus cess on tobacco and sin goods. Modi hailed it as a "GST bachat utsav" (savings festival), promising a "double bonanza" alongside income tax exemptions during the festive season. Yet, Congress slammed this as Modi claiming "sole ownership" of decisions by the constitutional GST Council. Ramesh pointed to persistent flaws: multiple tax brackets, high rates on essentials, evasion, compliance costs, and an inverted duty structure taxing inputs higher than outputs. He also flagged unaddressed sectoral issues in textiles, tourism, handicrafts, and agriculture, alongside MSME burdens like low interstate supply thresholds.

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Furthermore, Ramesh underscored states' unresolved demands for five more years of revenue compensation to safeguard fiscal health, a cornerstone of cooperative federalism. He advocated incentivizing state-level GST for electricity, alcohol, petroleum, and real estate to broaden the base. The opposition urged an apology for taxing essentials and called the changes a "band-aid after inflicting deep wounds." As consumers eye potential savings on medicines, automobiles, and daily goods, the debate highlights ongoing tensions between economic relief and structural reform in India's unified tax regime, implemented in 2017 to replace a patchwork of levies.

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