GST 2.0 should be 'good, simple tax', not 'growth suppressing tax': Congress
NEW DELHI: Congress on Saturday demanded an official discussion paper on GST 2.0 soon for a wider debate on it and said the reform should be towards a "Good and Simple Tax" in letter, spirit, and compliance, and not the "Growth Suppressing Tax" it has become.
Its assertion came a day after the PM announced that GST rates will be lowered by Diwali, bringing down prices of everyday use items.
Noting that a transformed GST 2.0 was a key pledge in the Congress manifesto for the 2024 LS elections, Congress general secretary Jairam Ramesh said the PM seems to have finally woken up to the fact that economic growth will simply not accelerate unless this transformation takes place and increases private consumption and private investment.
"Over the last seven years, the spirit of GST has been vitiated by an increased number of rates and the granting of multiple exemptions. The structure also seems to have facilitated evasion. There must be a drastic reduction in the number of rates," he said in a statement.
Ramesh said simplification of the rate structure is essential, but must be done in a manner that minimises revenue uncertainty to states and also eliminates the classification disputes that have become so common. "The GST compensation cess expires on March 31, 2026. This must be extended to offset any revenue uncertainty from the rationalisation of the rate structure," he said.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Mint
28 minutes ago
- Mint
Ministers greenlight two-rate GST, tax relief likely on a range of items
A range of goods from cars to kitchenware may turn cheaper in the near future, with a top panel of state ministers greenlighting a proposal to simplify India's indirect tax system. A ministerial panel formed by the Goods and Services Tax (GST) Council endorsed the Centre's proposal for a simplified tax structure on Thursday, setting the stage for its rollout before the coming festive season. Currently, GST is applied in four slabs - 5%, 12%, 18% and 28%. Plus, there is a cess levied on luxury items and so-called sin goods like tobacco and caffeinated beverages. The plan approved on Thursday envisages scrapping the 12% and 18% slabs. This will involve shifting most items in the 12% slab to 5%, and most of the products in the 28% slab including some automobiles to 18%. Insulin, condensed milk, preserved fish and vegetables, granite and marble, tableware and kitchenware and certain pharmaceutical products are among the products that will move from 12% to 5%. Sin goods and 'super luxury vehicles' may be part of a new 40% slab. Top-end SUVs could still benefit from lower tax burden, since the cess applicable on the 28% slab will come to an end. However, discussions are on for a new duty on sin goods like tobacco, which are also expected to move from the 28% slab plus cess at present to the proposed 40% slab without the cess, so that the tax incidence on them remains the same after the tax rate recast. The new system is a step towards a simpler mode in India's eight-year-old GST regime, originally conceived as a single uniform tax across the country, but later turned into a thicket of multiple rates and a cess on top of some of the products on the highest slab, 28%. The Confederation of Indian Industry (CII) applauded the decision. 'This will certainly reduce classification complexity and improve ease of doing business. Besides, this would streamline the overall GST rate structure and help make industry all the more competitive. The common man would benefit the most, with reduced prices," said director-general Chandrajit Banerjee said. The state ministers briefed the media after Thursday's meeting, expressing their support for the new regime. 'The group of ministers discussed the central government's proposal to drop the 12% and 28% slabs (for a two-rate structure) and has endorsed it. The recommendations will be placed before the GST Council," said Samrat Chaudhary, Bihar deputy chief minister who is also convenor of the group. West Bengal finance minister Chandrima Bhattacharya said the group endorsed the Centre's proposals and that nobody would oppose consumer-friendly measures. She said her state has proposed that tobacco and its preparations which currently attract a GST compensation cess in addition to 28% GST, should be levied a new duty so that the tax incidence on them remains unchanged even after the cess expires later this year. Uttar Pradesh finance minister Suresh Kumar Khanna said that every member of the ministerial group welcomed the Centre's proposals. Besides the convenor, the panel has five members, which also include Kerala finance minister K.N. Balagopal, Karnataka revenue minister Krishna Byre Gowda and Rajasthan health minister Gajendra Singh. 'GST rate rationalization is in the interest of the common man. It will give relief to them," said Khanna. When pro-people measures are taken, there will be some impact on revenue, but given the benefit to the people, everyone endorsed it", Khanna added. The GST Council will decide on the ministerial group's recommendations, he said. 'We have no issues in accepting pro-people measures. However, the extent of revenue loss due to these measures has not been quantified in the proposals. We have to also think about how to make up for the revenue loss," said Bhattacharya. The minister said that when the group of ministers presents its report to the Council, a note on this will be included. Experts said the decision is likely to boost demand and consumption. 'The move to cut GST slabs from four to just two is a big step towards simplification. For consumers, this means that many everyday goods and services that were earlier taxed at 12% may now come down to 5%, directly reducing prices. Similarly, items that attracted 28% GST could soon be available at 18%, which will make products like appliances, electronics and even cars more affordable," said Sandeep Sehgal, partner-tax at AKM Global, a tax and consulting firm. For businesses, a simpler structure means fewer disputes and easier compliance, Sehgal said. 'While sin goods and super luxury cars will fall under a higher 40% rate, the removal of the additional cess will still ease the overall burden on luxury vehicles. Overall, this reform is expected to increase demand, boost sales in key sectors like fast-moving consumer goods, consumer durables and automobiles and give the economy a positive push just before the festive season," said Sehgal. Minister Bhattacharya explained that the GST compensation cess levied on certain products in the 28% slab will have to be discontinued as it cannot be levied beyond a period. Therefore, to ensure that the tax incidence on products like tobacco, which are on this slab and also currently attract compensation cess at various rates, remain unchanged after the tax rate restructure, a new duty has to be introduced on them in place of the cess. This could be done by amending the GST law, Bhattacharya explained in response to a query. Bhattacharya said that one has to ensure that while the health and life insurance premiums are freed of GST, companies do pass on that benefit to the consumer. 'One has to ensure that insurance companies do not enhance premiums or behave in any way that deny the benefit of tax relief to the ultimate consumer. It is the duty of the central government to ensure that," the minister said. Bhattacharya is also a member of another ministerial group that on Wednesday accepted a central government proposal to spare free health and life insurance premiums from 18% GST. Another expert said the government should also make the necessary changes to correct the problem of finished products attracting lower or no tax, while inputs bear a higher tax outgo. This anomaly, referred to as inverted tax structure, affects the appeal of certain segments of the industry for potential investments and has been a priority for the policymakers to resolve. 'Industry does look forward to addressing duty inversion refund process comprehensively too and this has been identified by the finance ministry as a key structural issue," said Mahesh Jaising, partner and leader, indirect tax, Deloitte India.
&w=3840&q=100)
Business Standard
28 minutes ago
- Business Standard
Auto firms split over GST rejig impact on car and two-wheeler sales
Maruti Suzuki India Chairman R C Bhargava said that GST on cars is currently 28 per cent, with a cess on larger cars pushing the total burden to 40-45 per cent Surajeet Das Gupta New Delhi Listen to This Article With the Group of Ministers clearing a new goods and services tax (GST) regime of 5 and 18 per cent, scrapping the 12 and 28 per cent slabs, automotive companies are split on its immediate impact. Many fear buyers may defer purchases of cars and two-wheelers until the GST Council gives final approval, which could hand them a bonanza. Maruti Suzuki India Chairman R C Bhargava (pictured) said that GST on cars is currently 28 per cent, with a cess on larger cars pushing the total burden to 40–45 per cent. 'Now with only two slabs, GST logically comes down
News18
an hour ago
- News18
Stormy End To Parliament Monsoon Session: Op Sindoor, Dhankhar's Exit, SIR Protests And More
Last Updated: The opposition ended the monsoon session seeking a debate on "electoral fraud", prompting PM Narendra Modi to make scathing remarks about the "insecurity" of the Congress From a riveting discussion on 'Operation Sindoor' to daily disruptions over the Bihar SIR and the dramatic exit of Rajya Sabha chairman Jagdeep Dhankhar, the month-long monsoon session of Parliament came to a stormy end on Thursday. The opposition once again ended the day with protests, seeking a debate on electoral fraud prompting Prime Minister Narendra Modi to make scathing remarks about the 'insecurity" of the Congress. Amid all the noise, however, the government managed to introduce 14 Bills and secure passage of 12 key legislations, including Union Home Minister Amit Shah's 'tainted PMs-CMs" Bill that has also attracted opposition ire for being 'draconian". There were, however, some moments of calm as well with a discussion on astronaut Shubhanshu Shukla's return home after a historic trip to space. The central government termed the session as 'fruitful and successful" since all its planned legislative business were transacted before the Lok Sabha and the Rajya Sabha were adjourned sine die. In his concluding remarks, Speaker Om Birla lamented the 'unparliamentary behaviour" of the members, calling the 'planned disruptions" unfortunate and against the dignity of the House. The only structured discussion in Parliament was about Operation Sindoor, which lasted 19 hours in the Lok Sabha and 16 hours in the Rajya Sabha. It, however, featured a high-voltage confrontation between Prime Minister Narendra Modi and opposition leader Rahul Gandhi. Dhankhar's Sudden Resignation Vice President and Rajya Sabha chairman Jagdeep Dhankhar left the ruling side silent and the opposition unusually sympathetic as he tendered his resignation citing health reasons. The 'Tainted PMs-CMs' Bill The Bill on the removal of ministers, including the PM and CMs, if detained for 30 consecutive days on serious criminal charges, triggered acrimonious scenes in both the Houses as tempers flared and copies of it were torn and flung. Members of the ruling and opposition alliances came face-to-face when Shah moved to introduce them Shah's Bills Referred to JPC The three controversial Bills introduced by Shah were referred to a joint committee of Parliament. On Thursday, the Rajya Sabha adopted a motion to nominate 10 members to the committee of both Houses, which will scrutinise the three Bills. The Upper House adopted a motion to concur with the recommendation of the Lok Sabha in joining the 31-member committee. A total of 21 members will be from the Lok Sabha. The motion to send members to the committee was adopted with voice vote, amid stiff opposition and protests. PM Modi's Scathing Remarks on Congress On the concluding day, Prime Minister Narendra Modi expressed disappointment at the absence of normal proceedings and said bright and young MPs of the Congress do not get to take part in discussions due to the 'insecurity" of its leadership. Sources said he made these remarks at the customary informal meeting of leaders from different parties in the Lok Sabha Speaker's office after the House was adjourned. While he did not name Rahul Gandhi, his remarks were apparently aimed at the opposition leader at the centre of the 'vote chori' campaign. Key Bills Moved and Passed Despite repeated disruptions, adjournments and walkouts, 14 Bills were introduced and 12 key legislations were passed – Promotion and Regulation of Online Gaming Bill, 2025; Mines and Minerals (Development and Regulation) Amendment Bill, 2025; and the National Sports Governance Bill, 2025. The new Income Tax Bill was also cleared by the Lok Sabha and returned by the Rajya Sabha. The Lok Sabha secretariat said the House lost more than 84 hours to forced adjournments, the highest in the 18th Lok Sabha formed in June last year after the general elections. The monsoon session began on July 21 and had 21 sittings with 37 hours and seven minutes of effective business, as per the Lok Sabha secretariat. Birla said all parties had decided at the beginning of the session that discussions will be held for 120 hours in this session. 'The Business Advisory Committee also agreed to this. But due to continuous deadlock and planned disruptions, we could barely work for 37 hours in this session," he underlined. top videos View all In the Rajya Sabha, deputy chairman Harivansh lamented that the entire session was marred by repeated disruptions and members could not get an opportunity to raise meaningful issues despite the best efforts of the chair. He said the House functioned for only 41 hours and 15 minutes. 'This not only results in the loss of precious parliamentary time but deprives us of the opportunity to deliberate on several matters of public importance. The productivity of this session stood at a disappointing 38.88 per cent, something that calls for serious introspection," he said. (With agency inputs) Click here to add News18 as your preferred news source on Google. Get Latest Updates on Movies, Breaking News On India, World, Live Cricket Scores, And Stock Market Updates. Also Download the News18 App to stay updated! tags : Jagdeep Dhankhar Narendra Modi Operation Sindoor Parliament monsoon session Rahul Gandhi view comments Location : New Delhi, India, India First Published: August 21, 2025, 23:35 IST News politics Stormy End To Parliament Monsoon Session: Op Sindoor, Dhankhar's Exit, SIR Protests And More | Highlights Disclaimer: Comments reflect users' views, not News18's. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to our Terms of Use and Privacy Policy. Loading comments...
