NEW DELHI: The Congress along with eight opposition-ruled states said it favors significant reforms to the Goods and Services Tax (GST) and would back rate cuts on essential items.
In a statement shared on handle X, Congress communications chief Jairam Ramesh, said that the Congress has long been advocating for a GST 2.0 that reduces rate slabs, cuts rates, and simplifies procedures and compliance requirements, especially for MSMEs.
The eight states, including Karnataka, Himachal Pradesh, Jharkhand, Kerala, Punjab, Tamil Nadu, Telangana, and West Bengal, have expressed support for reducing GST rate slabs and cutting rates on essential items. However, they have also raised key concerns that need to be addressed, including that a mechanism must be put in place to ensure that the benefits of rate cuts are passed on to consumers.
Ramesh said that States should be compensated for five years, with 2024-25 as the base year, to offset potential revenue losses due to rate cuts. Additional levies on ‘sin’ and luxury goods above 40 percent should also be fully transferred to states.
Ramesh emphasized that the GST Council meeting scheduled for next week should not be merely a headline-grabbing exercise but should advance the cause of genuine cooperative federalism.
“The Indian National Congress has for long been demanding a GST 2.0 that not only reduces rate slabs and cuts rates but also brings about drastic simplification of procedures and compliance requirements, especially for MSMEs,” Ramesh said.
The Congress party hopes that the GST Council will take into account the concerns of all states and work towards a more equitable and efficient tax regime.
Agencies