Congress Leader Calls GST Reforms a Belated U-Turn
Congress claims GST reforms are eight years late.
Senior Congress leader and former Finance Minister P. Chidambaram hailed the GST Council’s sweeping overhaul of India’s Goods and Services Tax (GST) regime as a “welcome” but belated “U-turn,” criticizing the government for ignoring flaws in the tax system for eight years. The reforms, announced Wednesday by Finance Minister Nirmala Sitharaman, slash rates on everyday items and exempt personal health and life insurance from GST, delivering relief to millions.
The GST Council, in a unanimous decision, simplified the tax structure from four slabs (5%, 12%, 18%, and 28%) to two (5% and 18%), effective September 22, coinciding with Navaratri. A special 40% slab will apply to luxury items like high-end cars, tobacco, and cigarettes. Essential goods like roti, paratha, hair oil, ice cream, toothpaste, and appliances such as air conditioners and washing machines will see significant rate reductions, with many dropping from 18% or 12% to 5%. Insurance premiums, previously taxed at 18%, are now exempt, easing the burden on families.
Chidambaram, in a statement, welcomed the changes but argued they were long overdue. “Congress, economists, and the middle and poorer sections have pointed out for years that the GST’s design and rates were wrong, but the government turned a deaf ear,” he said. “I’m happy they’ve realized the path they walked for eight years was wrong and done a U-turn.” He emphasized that GST should have always been a “Good and Simple Tax,” offering relief to the middle and lower classes.
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In a Wednesday X post, Chidambaram speculated on the government’s motives, citing sluggish economic growth, rising household debt, falling savings, upcoming Bihar elections, and U.S. tariffs as possible drivers. He criticized Finance Minister Sitharaman for defending the “flawed” GST structure until now, calling it “heartening” to see her applaud the reforms.
The rate cuts aim to boost domestic spending and mitigate the economic impact of U.S. tariffs, while the simplified structure supports small businesses and enhances ease of living. The reforms, described as a “Diwali gift” by the government, mark a significant shift in India’s tax policy, though Chidambaram’s remarks highlight ongoing political tensions over its timing and intent.
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