GST overhaul: Cong says wait for ‘true GST 2.0’ continues, demands compensation for states for 5 more yearsGSTDated:- 4-9-2025PTINew Delhi, Sep 4 (PTI) With the GST Council approving a complete overhaul of the Goods and Services Tax (GST) regime, the Cong
GST overhaul: Cong says wait for 'true GST 2.0' continues, demands compensation for states for 5 more years
GST
Dated:- 4-9-2025
PTI
New Delhi, Sep 4 (PTI) With the GST Council approving a complete overhaul of the Goods and Services Tax (GST) regime, the Congress on Thursday termed it a “GST 1.5” and said the wait for a “true GST 2.0” continues.
The opposition party also demanded that all states should be given compensation for a period of five years, considering 2024-25 as the base year, citing that the reduction in rates would have an adverse effect on their revenue.
Congress president Mallikarjun Kharge said that for almost a decade, the party has been demanding simplification of GST.
“The Modi government changed 'One Nation, One Tax' to 'One Nation, 9 Taxes'. It included tax slabs of 0%, 5%, 12%, 18%, 28% and special rates of 0.25%, 1.5%, 3% and 6%,” Kharge said.
“The Congress party had demanded GST 2.0 with a simple and rational tax system in its 2019 and 2024 man
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ngh Tax”, Kharge sakd.
“Two-thirds of the total GST i.e. 64% comes from the pockets of the poor and the middle class, but only 3% GST is collected from billionaires, while the rate of Corporate Tax has been reduced from 30% to 22%,” he said.
In the last 5 years, Income Tax collection increased by 240% and GST collection increased by 177%, he claimed.
“It is a good thing that even after 8 years of delay, Modi government woke up from its deep slumber on GST and talked about Rate Rationalisation, ” he said.
All states should be given compensation for a period of five years, considering 2024-25 as the base year, because the reduction in rates is sure to have an adverse effect on their revenue, he said.
The complex compliances of GST will also have to be eliminated, only then will MSMEs and small industries be truly benefited, the Congress chief said.
Congress general secretary in-charge communications Jairam Ramesh said that a key demand of the states made in the true spirit of co
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said.
“Faced with a lack of buoyancy in private consumption, subdued rates of private investment, and endless classification disputes, the Union Finance Minister has finally recognised that GST 1.0 had reached a dead end. In fact, the very design of GST 1.0 was flawed and this had been pointed out by the INC way back in July 2017 itself, when the PM had made one of his typical U turns and decided to introduce GST,” he said.
It was meant to be a Good and Simple Tax. It turned out to be a Growth Supressing Tax, Ramesh said.
Last evening's announcements have certainly made headlines since the prime minister had already laid down the pre-Diwali deadlines, he said.
Presumably the benefits of rate cuts will be passed on to consumers, he added.
“However, the wait for a true GST 2.0 continues. Whether this new GST 1.5, if it can be called that, stimulates private investment – especially in manufacturing – remains to be seen. Whether this will ease the burden on MSMEs, time alone will t
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aid.
“I am happy that the government has realised that the path on which they had walked for 8 years was wrong, and done a U-turn,” he said.
It should have always been a 'Good and Simple Tax', he said.
The middle and poor classes will heave a sigh of relief, Chidambaram said.
“The government and, in particular, the FM (Nirmala Sitharaman) had defended the flawed design and the complicated multiple rates so far. It is heartening to see the FM and other government leaders applauding the changes made yesterday!” the Congress MP said in his statement on Thursday.
In a post on Wednesday night, Chidambaram said, “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, he 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. It wil
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