The Congress said Monday that Prime Minister Narendra Modi's pledge to simplify the GST structure validates its criticism of the "flawed" Goods and Services Tax.
Jairam Ramesh, general secretary of communications for the Congress, asserted that the economy has never fully recovered from the two "Modi-inflicted shocks" of demonetisation and GST 1.0.
"It was the Vijay Kelkar Committee report of 2004 that led to the first announcement of GST in P Chidambaram's Budget Speech of Feb 28, 2006. Here, Dr Kelkar and his colleagues offer their suggestions for a transformed GST 2.0," Ramesh said in a post on X.
"The Indian National Congress stands vindicated on its criticism of the flawed GST 1.0 that was pushed through on July 1, 2017, giving the economy its second serious shock after the notebandi of Nov 8, 2016. The economy has never recovered from these twin Modi-inflicted shocks," the Congress leader said in his post.
Rahul Gamdhi has dubbed the GST 1.0 the "Gabbar Singh Tax," and the Congress has been claiming that it is defective and that there should only be one tax.
On Sunday, Prime Minister Modi announced that the Center had sent the next-generation GST reform draft to the states and asked for their cooperation in order to put the proposal into effect before Diwali. He claimed that both small and large businesses as well as the impoverished and middle class would gain from the GST reform.
In his August 15 Independence Day speech from the Red Fort's ramparts, Modi had revealed his plan to amend the GST law. Two tax slabs of 5 pc and 18 pc plus a special 40 pc top bracket for 5-7 demerit goods will replace the current GST tax rates of 0 pc on necessities, 5 pc on everyday use items, 12 pc on standard goods, 18 pc on electronics and services, and 28 pc on luxury and sin goods.
If the GST Council approves the proposed two-slab regime, the existing four slabs in the Goods and Services Tax (GST) regime will be replaced, eliminating the 12 pc and 28 pc slabs.Two tax slabs of 5 pc and 18 pc plus a special 40 pc top bracket for 5-7 demerit goods will replace the current GST tax rates of 0 pc on necessities, 5 pc on everyday use items, 12 pc on standard goods, 18 pc on electronics and services, and 28 pc on luxury and sin goods.
The changes that have come about after nearly six months of deliberations and dozens of meetings have been conceived in a way to ensure that demand for tax tweaks does not arise, and also that input tax credit (ITC) does not get accumulated in the system.
Also Read: PM urges states to cooperate in implementing GST reforms proposal
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