Congress has long argued GST is "Growth Suppressing Tax": Jairam Ramesh says reforms inadequate

New Delhi [India], September 21 (ANI): The Congress on Sunday criticised PM Modi’a address on GST reforms and said that the party has long argued that the Goods and Services Tax (GST) is a Growth-Suppressing Tax and that the current reforms are inadequate.

Congress leader Jairam Ramesh criticised the PM claiming ownership of the recent amendments to the GST regime.

In a post shared on X, Ramesh said, “The Prime Minister addressed the nation today to claim sole ownership of the amendments made to the GST regime by the GST Council, a constitutional body.”

The Congress leader also argued that the current structure is burdened with too many tax brackets, punitive rates on mass-consumption items, large-scale evasion and misclassification, high compliance costs, and an inverted duty structure that discourages output.

“The Indian National Congress has long argued that the GST has been a Growth Suppressing Tax. It is plagued with a high number of tax brackets, punitive tax rates for items of mass consumption, large-scale evasion and misclassification, costly compliance burdens, and an inverted duty structure (lower tax on output as compared to inputs). 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.

The Congress leader also said that the current GST reforms are inadequate. According to Ramesh, outstanding issues include, “The widespread concerns of MSMEs – the major employment generators in the economy – must be addressed meaningfully. Apart from major procedural changes, this involves further increasing the thresholds that apply to interstate supplies. Sectoral issues that have surfaced.”

“Sectoral issues that have surfaced — for instance in textiles, tourism, exporters, handicrafts and agricultural inputs — must be tackled; States should be incentivized to move towards the introduction of state-level GST to cover electricity, alcohol, petroleum, and real estate as well; The key demand of the states made in the true spirit of cooperative federalism — namely, the extension of compensation for another five years to fully protect their revenues– remains unaddressed,” he added.

Ramesh further questioned whether the reforms, delayed by eight years, would actually stimulate private investment and boost GDP growth. He highlighted India’s rising trade deficit with China, which has doubled to over $100 billion in the past five years, and warned that Indian businesses are struggling under oligopolistic pressures, forcing many entrepreneurs to relocate abroad.

“Whether this round of GST changes–delayed by 8 years–will actually boost the private investment that is essential for higher GDP growth remains to be seen. Meanwhile, the trade deficit with China has doubled in the last five years to cross $ 100 billion. And Indian business is crippled by fear and oligopolisation that is leading many to resettle abroad,” Congress leader said.

Earlier today, Prime Minister Narendra Modi announced the implementation of the next-generation Goods and Services Tax (GST) reforms from September 22, marking what he called a major step towards the Aatmanirbhar Bharat Abhiyan.

Addressing the nation ahead of the rollout, PM Modi said the reforms would usher in a countrywide “GST Bachat Utsav,” benefiting poor, middle-class, farmers, traders, and entrepreneurs alike.

“From the sunrise of the very first day of Navratri, the nation is taking another important and major step towards the Aatmanirbhar Bharat Abhiyan. Tomorrow, on the first day of Navratri, September 22, along with the rising of Suryadev, the Next Generation GST Reforms will come into effect,” he said.

The Prime Minister said that with the increased savings and easier purchases, the poor, middle class, farmers, women, traders and entrepreneurs of the country are all set to “benefit greatly.”

“From tomorrow, across the country, a ‘GST Bachat Utsav’ will begin. In this GST Bachat Utsav, your savings will increase and you will be able to purchase your favourite items more easily. The poor, middle class, neo middle class, youth, farmers, women, shopkeepers, traders, and entrepreneurs — all will benefit greatly,” he said.

PM Modi said, “During this festive season, everyone will have reason to celebrate, and the happiness of every family in the country will grow.”

Calling it a festive gift, the Prime Minister said the reforms would accelerate India’s growth story, make business easier, attract investment, and ensure every state becomes an equal partner in development.

“When India took the historic step of implementing GST in 2017, it marked the beginning of changing an old system and creating a new history. For decades, the people of our country, including all of you and our traders, were caught in the web of multiple taxes — octroi, entry tax, sales tax, excise duty, service tax, and dozens of other such levies,” he said. (ANI)

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