PM claiming 'sole ownership' of GST regime amendments: Congress leader Jairam Ramesh

New Delhi, Sep 21 (PTI) The Congress on Sunday accused Prime Minister Narendra Modi of taking "sole ownership" of the amendments made to the GST regime and said the current reforms were inadequate, with no resolution to the states' demand for an extension of compensation for another five years.

A day before reduced GST rates come into effect, Modi made a strong pitch for promoting 'swadeshi' goods and asserted that the next generation GST reforms would accelerate India's growth story, increase ease of doing business, and attract more investors.

In his address to the nation, Modi said a 'GST bachat utsav (savings festival)' will begin from the first day of Navratri, and coupled with the income tax exemption, it will be a "double bonanza" for most people.

Reacting to his address, the Congress general secretary, in-charge, communications, said Modi addressed the nation to "claim sole ownership of the amendments made to the GST regime by the GST Council, a constitutional body." The Indian National Congress has long argued that the Goods and Services Tax has been a "Growth Suppressing Tax", he said.

"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)," Ramesh said in a post on X.

"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.

Ramesh said the current GST reforms were inadequate, with outstanding issues, including the widespread concerns of MSMEs, the major employment generators in the economy.

"Apart from major procedural changes, this involves further increasing the thresholds that apply to interstate supplies," he said.

Ramesh claimed that there were also sectoral issues – for instance, in textiles, tourism, exporters, handicrafts and agricultural inputs – that must be tackled.

States should be incentivised to move towards the introduction of state-level GST to cover electricity, alcohol, petroleum, and real estate as well, the Congress leader said.

"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," Ramesh said.

He wondered whether the GST changes, "delayed by eight years", would actually boost the private investment essential for higher GDP growth.

Meanwhile, the trade deficit with China has doubled in the last five years to cross USD 100 billion, Ramesh pointed out.

He claimed that Indian business was crippled by fear and "oligopolisation", which is leading many to resettle abroad.

From kitchen staples to electronics, from medicines and equipment to automobiles, goods and services will be cheaper from Monday as the reduced GST rates on about 375 items come into effect.

The reforms, hammered by the GST Council, comprising the Centre and states, will come into effect from September 22 -- the first day of the Navaratri.

The tax regime now assumes a two-tier structure, with the majority of goods and services attracting tax of 5 and 18 per cent, and ultra luxury items being levied a 40 per cent tax. Tobacco and related products will continue to be in the 28 per cent plus cess category.

Till now, the GST was levied in four slabs of 5, 12, 18 and 28 per cent. Besides, a compensation cess is levied on luxury items and demerit or sin goods.

Mass consumption items like ghee, paneer, butter, 'namkeen', ketchup, jam, dry fruits, coffee and ice creams, and aspirational goods like TV, AC and washing machines will become cheaper. PTI ASK VN VN