'Our pleas fell on deaf years': Congress 'welcomes' GST rate cuts; but calls decision '8 years too late'

NEW DELHI: Congress on Thursday called the latest cuts on GST approved by the Centre as "8 years too late."

In a social media pot on X, former Union minister P Chidambaram said that the prevailing taxes should not have been introduced in the first place.

"The GST rationalisation and the reduction in rates on a range of goods and services are WELCOME but 8 years TOO LATE The current design of GST and the rates prevailing until today ought not to have been introduced in the first place," Chidambaram said.



"We have been crying hoarse for the last 8 years against the design and rates of GST, but our pleas fell on deaf years," he added.

This comes a day after finance minister Nirmala Sitharaman announced sweeping Goods and Services Tax rate cuts effective September 22. The GST revamp brings a majority of items in the 5% and 18% slabs, with several items now facing 0% or nil tax and some added to the 40% 'sin tax' slab.

"For common man and middle class items, there is a complete reduction from 18% and 12 to 5%. Items such as hair oil, toilet, soap bars, soap bars, shampoos, toothbrushes, toothpaste, bicycles, tableware, kitchenware and other household articles are now at 5%," FM Sitharaman said. "UHT milk, paneer, all the Indian breads will see nil rate," she added.

The changes in GST rates on services and goods other than cigarettes, chewing tobacco products, unmanufactured tobacco and beedi will be effective from Sept 22.

The 56th Goods and Services Tax (GST) Council meeting commenced on Wednesday to review potential rate reductions and category adjustments for numerous items under the indirect taxation system. The extensive 56th GST Council meeting, spanning 10.5 hours, provided a platform for the Centre and states to deliberate and discuss crucial tax proposals.

The GST Council endorsed a transition from the existing four-tier GST framework (5, 12, 18 and 28 per cent) to a simplified two-rate structure of 5 and 18 per cent. Additionally, certain items like high-end vehicles, tobacco and cigarettes will attract a special 40 per cent rate.

Jairam Ramesh reacts to new GST rate cuts:

Congress leader Jairam Ramesh on Thursday reacted to the Sitharaman’s announcements on GST rate cuts. He said that the reforms fall short of delivering the comprehensive GST 2.0 that the party has long advocated.

In a post on X, he said, "The Indian National Congress has for long been advocating for a GST 2.0 that reduces the number of rates, cuts the rates on a large number of items of mass consumption, minimises evasion, mis-classification, and disputes, does away with inverted duty structure (lower tax on output as compared to inputs), eases the compliance burden on MSMEs, and expands GST coverage."


He criticized the timing of the announcements, pointing out that the prime minister had already outlined the key decisions in his Independence Day speech, raising questions about the GST Council’s role as a constitutional body.

While the cuts may benefit consumers, Ramesh said it remains unclear whether they will stimulate private investment, especially in manufacturing, or ease the compliance burden on MSMEs. He also highlighted that states’ demand for extended compensation to safeguard revenues remains unaddressed.

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