New Delhi: Congress president Mallikarjun Kharge on Thursday slammed the Centre over the Goods and Services Tax (GST), alleging that the government has turned the promise of “One Nation, One Tax” into “One Nation, Nine Taxes.”
Kharge pointed out that the Congress has been advocating GST reforms for over a decade. He criticized the GST introduced under the NDA government, which includes tax slabs of 0%, 5%, 12%, 18%, 28%, along with special rates of 0.25%, 1.5%, 3%, and 6%.
“For nearly a decade, the Indian National Congress has demanded a simplified GST. Yet, the Modi government has converted ‘One Nation, One Tax’ into ‘One Nation, Nine Taxes,’ comprising slabs of 0%, 5%, 12%, 18%, 28% and special rates of 0.25%, 1.5%, 3%, and 6%,” Kharge wrote on X.
He recalled that the Congress party included GST reforms in its 2019 and 2024 Lok Sabha election manifestos and alleged that the BJP had opposed the GST Bill introduced by UPA-2 Finance Minister Pranab Mukherjee in 2011. Kharge added that when Narendra Modi was Gujarat Chief Minister, he had vehemently opposed GST.
“The Congress had demanded GST 2.0 with a simple, rational tax system in our 2019 and 2024 manifestos. We also pushed for easing GST’s complex compliance requirements, which have heavily impacted MSMEs and small businesses. The UPA formally announced GST in the Lok Sabha in 2005, and when the Bill was brought in 2011, BJP opposed it. Modi Ji, then CM, was strongly against GST,” he said.
Kharge also criticized the Centre for celebrating record GST collections, noting that for the first time, farmers are being taxed.
“The BJP government celebrates record GST collections as if taxing ordinary people is an achievement. For the first time in India’s history, GST has been imposed on farmers, covering at least 36 agricultural items,” he said.
The Congress leader highlighted that his party refers to GST as the “Gabbar Singh Tax,” citing its application on essential items like milk, curd, flour, grains, children’s books and pencils, as well as oxygen, insurance, and hospital expenses.
“Everyday items like milk, curd, flour, grains, children’s pencils and books, oxygen, insurance, and hospital expenses are taxed under GST. That’s why we call it the ‘Gabbar Singh Tax.’ Two-thirds of GST revenue—64%—comes from the poor and middle class, while only 3% comes from billionaires, and corporate tax has been reduced from 30% to 22%,” Kharge stated.
Reflecting on the rise in income tax and GST collections over the past five years, Kharge said the government has finally woken from its “Kumbhakarnian sleep” and is now discussing rate rationalization. He also demanded compensation for states, warning that lower rates could impact their revenue.
“Income tax collections have risen 240% and GST collections by 177% over the last five years. It’s good that, eight years late, the Modi government has awakened to GST rate rationalization. All states must be compensated for five years, taking 2024-25 as the base, since reduced rates will affect revenues. Simplifying GST compliance is essential for MSMEs and small industries to truly benefit,” he wrote.
The 56th GST Council meeting recently decided to rationalize GST rates into two main slabs: 5% and 18%, by merging the 12% and 28% rates.
- 5% slab: Essential goods and services, including food items like butter, ghee, cheese, pre-packaged snacks; agricultural equipment like drip irrigation systems, sprinklers, bio-pesticides, tractors, and harvesting tools; handicrafts and small industries such as sewing machines; and health-related items like medical equipment and diagnostic kits.
- 18% slab: Standard rate for most goods and services, including automobiles (small cars, motorcycles up to 350cc), consumer electronics, household items, some professional services, and auto parts.
- 40% slab: Luxury and sin goods, including tobacco, pan masala, cigarettes, bidis, aerated sugary beverages, luxury vehicles, high-end motorcycles above 350cc, yachts, and helicopters.
Certain essential services and educational items remain fully exempt from GST, including individual, family floater, and life insurance, as well as specific education and healthcare services.
