Opposition pressure forced govt to make changes in tax slabs: Congress

After the 23rd GST Council meeting held yesterday, quite a number of changes were announced giving a little relief to the taxpayers. As per the new changes, rates are cut down for 177 goods bringing them down in 18% slab.

Taking credit for the changes announced by the GST council, which also include the state Finance Ministers including those of the Congress ruled states, the opposition said that it was because of their pressure that the council was forced to make the changes.

The Congress party said that the party’s opposition had forced the government to relent and slash tax slabs for 178 items to 18% tax slab. Congress from the very beginning had been adamant on the point that the GST introduced by Prime Minister Narendra Modi was a decision taken in hast and it should be revised. The party had claimed that the idea of a single tax system was initially suggested by the party, but it had said about a single tax slab of 18% and not 5 different slabs.

The party also alleged that BJP had deliberately chosen this time to call for the GST council meet and announce the changes, in wake of the Gujarat Assembly election due in less than a months time. Congress said that “the populous changes were made with an eye on the Gujarat elections, though the Model Code of Conduct was in force in the state.”

Reacting to the changes made by the Modi government, Congress spokesperson, Randeep Surjewala said that “Might is not always right. Glad to see that the resolve of people and Congress party’s opposition has finally forced the government to relent. We will continue to fight for making GST from flawed to flawless.”

Former Finance Minister P Chidambaram in a series of tweets said that Congress is vindicated by the reduction in GST rates. He also thanked the Gujarat election that the government thought of making the changes in GST implementation.

Congress spokesperson Abhishek Manu Singhvi also commented that “It is the worst example globally of a noble conception how quickly it can be distorted to a nullity, out of arrogance and obstinacy. I am sure there will be some populous changes because of Gujarat elections, but a GST Council advising is being held in the middle of the Model Code of Conduct operational in Gujarat. Himachal may have ended, but it is a very nice time to call a GST Council meeting in the middle of elections in Gujarat.”

Singhvi also questioned the government’s belief of ‘one tax one nation’. He said that where is the one tax, it the seven tax and where is the one nation when 40% of the nation is kept out of GST in value terms. Taking a jibe at the Modi government, Singhvi remarked that “The Modi government and Finance Ministry functions on the basis of shoot first, take aim later and think last. The sequence should be reversed — think, aim and then shoot.”

He further added that, if the new regime is based on first shoot, then aim and then think, India, is surely going to face disaster very soon.

Congress Vice President Rahul Gandhi before the meeting of the GST council had tweeted a few suggestions that government should take. “Correct the fundamental flaw in GST architecture to give India a Genuine Simple Tax, Don’t waste India’s time with lip service, Acknowledge your incompetence, shed your arrogance and listen to the people of India,” Rahul tweeted.

Though the Congress Party claimed the credit of the changes, the pay said that the mission was only partially accomplished. The party said that “their core demand of overhauling GST rates and limiting the maximum taxation till 18% was still not met.

While, Puducherry Chief Minister V Narayanasamy said, “Instead of making flat taxation for hotel and restaurants, the BJP-led government has kept differential taxation for hotels above RS 7,500 category.”

Punjab Finance Minister Manpreet Singh Badal, however, complained that the government needs to settle down with one system, changes cannot be made every day like this, it has to follow one principle. Badal said that “We have been saying that GST process done in haste is cumbersome and finally it seems sense has prevailed. Frequent tinkering with rates has created uncertainty in the business. Every day you cannot change the tax system. Taxation has to be on principle.”

He also added that though Congress has achieved some of its goals, but the party is not happy yet as the core demand is yet to be accomplished.

West Bengal Finance Minister Amit Mitra informed that they had suffered a loss of Rs 90,000 crore after the flawed GST was implemented. He said that “We, the opposition, fought and brought down the tax rates on different items but they did not agree totally and have few essential items still on a higher slab of 28%.”

Delhi Finance Miniter Manish Sisodia criticising the decision of different tax slabs for restaurants and hotels. He said that “The differential tax in the restaurant and hotels will give impetus to the Licence Raj. The government should have one tax across this sector. We have been saying that for better compliance there is a need for lower tax slab. We have successfully done this in Delhi.”
After four months of the implementation of the new tax regime in India, there was still a lot of confusion and chaos amongst the people regarding GST. Many had criticised the move of the Modi government. The central trade union also came on to the roads to stage protest against the government in front of the parliament.
BJP fearing to lose the control and also realizing the Modi wave is soon fading away, may have taken the decision to revise its GST plans. These changes in the GST tax slabs may also be taken keeping in mind the upcoming assembly elections in Gujarat, as the Congress is using demonetization and GST are its main weapons against the BJP in its campaigning and the small and medium class traders and businessmen are also not very happy with the decisions of Modi.