New Delhi [India], September 22 (ANI): The launch of GST 2.0, dubbed “Bachat Utsav” (Festival of Savings) by Prime Minister Narendra Modi, has sparked a heated debate between the Centre and the Opposition.
While the government hails it as a landmark reform, the Opposition criticises it as inadequate and a “historic blunder” being corrected after eight years.
The Goods and Services Tax reforms approved by the Union Government on September 4 came into effect on Monday. GST 2.0 features two main tax slabs – 5% and 18%, with a 40% compensation cess for luxury and sin goods.
The Centre has presented GST 2.0 as a progressive step aimed at providing significant relief of Rs 2.5 lakh crore to the common people through indirect tax cuts.
On the other hand, the opposition has termed it a “historic” blunder under the leadership of Prime Minister Narendra Modi, which has been corrected after eight years of damage.
Prime Minister Narendra Modi wrote a letter to the Indian citizens after the GST reforms came into effect, highlighting that the ‘GST Bachat Utsav’ will boost savings and directly benefit every section of society.
“As the nation celebrates the beginning of Navaratri, I extend heartfelt wishes to you and your families. May this festival bring good health, happiness and prosperity to everyone. This year, the festive season brings an added reason to rejoice. From September 22nd, the Next Generation GST reforms have begun to make their presence felt, marking the start of a ‘GST Bachat Utsav’ or ‘GST Savings Festival’ across the country,” PM Modi wrote.
India’s Chief Economic Advisor Anantha Nageswaran, while speaking during the Network18 Reforms Reloaded 2025 summit in Delhi, noted that the combined impact of direct tax relief through income tax cuts and indirect tax relief through GST rate reductions will be over Rs 2.5 lakh crore. He, however, added that some other uncertainties may dilute the effect.
Calling the GST 2.0 a “Modi’s historic blunder”, Congress Lok Sabha MP Manickam Tagore lashed out at YSR Congress Party president YS Jagan Mohan Reddy over the latter’s appreciation of the Centre’s decision.
“Mr Jagan calls GST restructuring “revolutionary.” Let’s be clear — this is not a revolution. It’s just Modi’s historic GST blunder being corrected after 7 years of damage,” Tagore posted on X.
“Instead of demanding justice for Andhra, Jagan praises Modi & Nirmala. Reforms correcting Delhi’s mistakes are not revolutionary,” he added.
Union Petroleum and Natural Gas Minister Hardeep Singh Puri said that Goods and Services Tax (GST) reforms have brought a wave of happiness and celebration among people and can boost the Gross Domestic Product (GDP) of the country by 0.8 per cent.
“Apart from Navratri, the budget utsav has begun. There is a wave of happiness and celebration among people wherever you see… GST rates have been reduced, which will benefit all sections of society. But we are celebrating something else. These reforms can boost the GDP by 0.8%… Our path towards a Viksit Bharat goes through self-reliance. All sections of society have welcomed it,” Puri told ANI.
West Bengal Chief Minister Mamata Banerjee criticised the NDA government and said that all the relief would come from the coffers of state governments, and the Centre did not spend a single penny.
CM Mamata Banerjee said, “There is no credit to the central government. I was the first to write a letter demanding that insurance be exempt from GST. Many life-saving medicines and small items were subject to GST. The central government has not spent a single penny on this relief; it has all come from the coffers of state governments. They take the credit, but we have borne the cost.”
Meanwhile, Congress MP Jairam Ramesh hit out at Prime Minister Narendra Modi, saying that the latter opposed the Goods and Services Tax (GST) when he was the Chief Minister of Gujarat.
“From 2006-2014, for eight years, only one CM opposed the GST, and that CM became the Prime Minister in 2014 and took a U-turn and emerged as a messiah of GST in 2017,” Ramesh, General Secretary incharge of communications in Congress, told ANI.
Labelling the reductions as “historic,” Union Home Minister Amit Shah said that the GST rate cuts have been implemented on more than 390 products.
“Modi government’s gift of Next Gen GST reform to all the mothers and sisters of the country on the auspicious occasion of Navratri! Modi’s promise to the countrymen regarding GST reform has been implemented across the entire country starting today. In this GST, historic reductions have been made in taxes on more than 390 goods,” the Union Home Minister posted on X.
The reform in the Goods and Services Tax structure, which was approved during the 56th meeting of the GST Council earlier this month, is set to come into effect from September 22.
The current four-rate system will be replaced with a streamlined two-slab regime of 5% and 18%. A separate 40 per cent slab has been retained for luxury and sin goods.
This new framework is expected to ease compliance, reduce consumer prices, boost manufacturing, and support a wide range of industries, from agriculture to automobiles and from FMCG to renewable energy, and is intended to lower the cost of living, strengthen MSMEs, widen the tax base, and drive inclusive growth.
In the fast-moving consumer goods (FMCG) and dairy sector, major brands like Amul and Mother Dairy have announced substantial price cuts, reflecting the full benefit of the GST reduction. (ANI)
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