GST overhaul: BJP allies and Opposition welcome decision on rate rationalisation — Who said what

The Congress has termed the complete overhaul of the Goods and Services Tax (GST) regime as a “GST 1.5” and said time alone will tell whether it will stimulate private investment as well as ease the burden on MSMEs. The opposition party asserted that the wait for a “true GST 2.0” continues.

Union Finance Minister Nirmala Sitharaman made major announcements on September 3 after the meeting of the GST Council, which is a constitutional body. The GST Council approved limiting slabs to 5% and 18%, effective from September 22, the first day of Navaratri.

The panel approved simplifying the GST from the current four slabs – 5%, 12%, 18% and 28%, to a two-rate structure – 5% and 18%. A special 40% slab is also proposed for a select few items such as high-end cars, tobacco, and cigarettes.

Here are the political reactions after the GST overhaul

Narendra Modi, Prime Minister: The Union government had prepared a detailed proposal for broad-based GST rate rationalisation and process reforms, aimed at ease of living for the common man and strengthening the economy. “Glad to state that the GST Council, comprising the Union and the States, has collectively agreed to the proposals submitted by the Union Government on GST rate cuts & reforms, which will benefit the common man, farmers, MSMEs, middle-class, women, and youth,” he said.

Congress: 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.

P Chidambaram, Congress MP and former finance minister: 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. We have been crying hoarse for the last 8 years against the design and rates of GST, but our pleas fell on deaf ears.

Tamil Nadu: The DMK welcomed the decision but expressed concerns for the protection of the state’s revenue. State Finance Minister Thangam Thennarasu welcomed the automated mechanism for sanction of provisional refunds for exports and the inverted duty structure and supported the simplified registration mechanism for small and low-risk businesses to enable ease of doing business.

N Chandrababu Naidu, Andhra Pradesh Chief Minister: We welcome the GST reforms with revised slabs across daily essentials, education, healthcare, and agriculture. This pro-poor, growth-oriented decision will benefit all sections of society, from farmers to businesses.