Congress demands overhaul of GST architecture

Congress finance ministers described the decisions taken in the GST Council meeting on Friday as 'too little, too late'

Congress Vice-President Rahul Gandhi. Photo: PTI
Congress Vice-President Rahul Gandhi. Photo: PTI

The Congress party on Friday demanded an overhaul of the goods and services tax (GST) architecture, terming the existing system as “flawed”. 

Congress Vice-President Rahul Gandhi said it was time the Narendra Modi government shed its “arrogance” and acknowledged its “incompetence”. A little after the GST Council meeting ended, he tweeted that the Congress “will not allow BJP to impose a ‘Gabbar Singh Tax’ on India”.

In Guwahati, Congress finance ministers described the decisions taken in the GST Council meeting on Friday as “too little, too late”. They pitched for further thinning of the highest tax slab of 28 per cent. They demanded shifting of items like cement, paints, air conditioners, and washing machines from the 28 per cent to 18 per cent slab in the next meeting.

“There are a lot of items from the construction sector and white goods in the 28 per cent bracket that need to be brought down. Why should there be a 28 per cent category at all for any items except sin and luxury goods?” Punjab Finance Minister Manpreet Badal said.

“Why did it take five months for the government to lower rates? We have pitched for 18 per cent as the highest tax slab since the beginning,” Badal said. He said instead of taking credit, the government needed to apologise for putting items of common use in the highest tax slab.

Senior Congress leader P Chidambaram tweeted before the meeting: “Thanks to Gujarat elections, the government is forced to heed advice of opposition and experts on flaws in implementation of GST.”

However, when Finance Minister Arun Jaitley was asked whether the changes were made keeping in view the Gujarat elections, he said if lower rates helped consumers, then it was good. 

Bihar Deputy Chief Minister Sushil Kumar Modi said, “Thanks to (Arun) Jaitley for bringing in consensus on all major issues in the GST Council meeting. Only Jaitley can do it.”

Rahul Gandhi, who is scheduled to again visit poll-bound Gujarat from Saturday, said the government cannot break the back of the small and medium businesses, crush the informal sector and destroy millions of jobs. He demanded the Centre “correct the fundamental flaw in the GST architecture to give India a ‘Genuine Simple Tax’.” “Don’t waste India’s time with lip service,” he added.

In Patna, senior BJP leader Yashwant Sinha demanded that Prime Minister Narendra Modi sack Finance Minister Arun Jaitley. “The finance minister did not apply his mind while rolling out the goods and services tax and that’s why he is tinkering with the GST everyday...” Sinha said. 

“The prime minister should bring a new finance minister. I am saying this with full responsibility,” he said, adding that a raid raj was going on across the country and cases were being registered under the Income Tax Act.

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BJP spokesperson GVL Narasimha Rao said Chidambaram was “dubiously claiming credit for lowering of rates”. He said this “betray a sense of anxiety on the part of the Congress party” as the step would enhance the PM’s appeal among voters. He said lowering of the GST on all types of restaurants was a huge relief compared to even the pre-GST era and would warm millions of hearts in urban India and undoubtedly expand the fan base of the prime minister. 

The Confederation of All India Traders welcomed the cutting of tax rates on 177 items. It said the change would lead to an estimated revenue loss of Rs 34,000 crore. The CAIT bemoaned that the Centre didn’t take traders into confidence. CAIT secretary general Praveen Khandelwal said issues with the GST portal needed to be resolved.

Abhishek Jain, tax partner, EY India, said the decisions of the Council meeting were a mixed bag for the real estate sector with positives like rates of granite and marble being lowered from the current 28 per cent to 18 per cent and negatives like non-alteration of cement rates. 

Vishal Raheja, DGM, Taxmann, said the reduction in rates of 50 items left in tax slab of 28 per cent would be a crucial step and would clear the way for moving from four-tier tax structure to lesser slabs. 

(With inputs from Archis Mohan)