The Congress party slammed the Centre on the 5th anniversary of the GST laws, demanding that the “flawed, complex GST” be replaced. Congress also promised GST 2.0 if the party returned to power.
Former Congress President Rahul Gandhi reiterated that GST is “Gabbar Singh Tax” and stated that if voted to power, Congress would come up with GST 2.0 – a single slab, low rate tax.
In his tweet, the Wayanad MP said, “Congress’ Genuine Simple Tax was turned into Gabbar Singh Tax by BJP. 6 rates, 1000+ changes in 1,826 days! Ease? It’s a nightmare to do business, esp. for MSMEs. Congress will revive business & jobs with GST 2.0 – single, low rate, shared fairly with the states.”
Gandhi scion has been consistently raising a demand for a single tax slab under the GST regime.
Addressing a special press conference at AICC headquarters in Delhi, former Finance Minister P Chidambaram along with Congress General Secretary in-charge Communication Jairam Ramesh demanded that all party meeting by the government should be called to discuss GST laws related issues.
Congress also demanded that the tax laws should be discussed in the upcoming Monsoon session of the Parliament.
Stating that implementation of GST laws has wrecked the Indian economy, P Chidambaram said, “Today, GST celebrates its 5th birthday. There is nothing really to celebrate. GST had serious birth defects. In the last five years, these defects have only become worse and all those touched by GST have been seriously injured. None more than the common people, who consume goods and services, pay exorbitant taxes without knowing why the government has imposed the crushing tax burden upon them.”
Congress leaders pointed out that the Centre has made several directions related to GST.
Chidambaram said, “The law is so defective, that the government has been forced to issue hundreds of executive directions. In five years, the government has issued 869 notifications, 143 circulars and 38 orders! That is a change every second day! This is a GST that is flawed, defective and unstable.”
Chidambaram said that Congress “rejects current GST”.
“GST laws and the manner of their implementation have wrecked the economy. As far as the Congress Party is concerned, we reject the current GST and, as promised in the Election Manifesto of 2019, we will work towards the replacement of the current GST by GST 2.0, which will be a single, low rate.”
Jairam Ramesh added, “The GST proposed by the UPA government and the GST implemented by Modi governmnet are poles apart.”
UPA’s GST vs NDA’s GST
Former Finance Minister P Chidambaram maintained that the current GST isn’t what the UPA government had proposed.
Congress Rajya Sabha MP said, “At the outset, the Congress Party wishes to make it absolutely clear that the so-called GST that is in force today was not the GST envisaged by the UPA government. I have made it clear on the floor of Parliament and elsewhere that the GST of our conception was a single, low rate across all goods and services with few exemptions. There could be a small + or a small – to the single rate in a few cases during the transition period.”
Congress asks “Why Six GST slabs?”
Meanwhile, Rajya Sabha MP P Chidambaram added, “ The GST that we have today is a complex web of many rates, conditions, exceptions and exemptions that will leave even an informed tax payer completely bewildered. Not all registered dealers are informed taxpayers; as a result, they are at the mercy of the tax-collector. Currently, there are six rates — 0.25, 3, 5, 12, 18 and 28 per cent. Besides, there are zero rated and exempted goods. Every tweak of the tax rates is another twist of the knife in the deep wounds of small businesses. After 5 years of GST, there is no rationalisation in the number of returns to be filed.”
Former Union Minister Jairam Ramesh added, “If voted to power, we’ll implement one tax slab under GST and that too, a low rate tax.”
The Flaws in GST pointed by Congress
Saying that the current GST is flawed, Chidambaram further added, “Compliance with the e-way bill and e-invoicing is no simpler. Various provisions of the GST laws have still not been implemented and, instead, the government has resorted to stop-gap or “temporary” arrangements, some of which have lasted 5 years. Claiming refunds is a nightmare and thousands of cases are being litigated in the courts. Adding to these woes is the recurrence of technical glitches that have not been sorted out even after 5 years.
Congress claims GST destroyed MSMEs
Chidambaram said, “A flawed GST has led to large-scale destruction of MSMEs, a sector that contributes up to 90% of the jobs in the manufacturing sector. Many small units have simply gone out of business. Small businesses that are not either registered or not required to be registered under GST have been cut out of the supply chain. Demonetisation along with a flawed GST have put an end to thousands of small businesses and, with their exit, lakhs of jobs have also perished. The only beneficiaries of the flawed GST are big businesses, chartered accountants and tax lawyers. The costs have far outweighed any gains.”
Chidambaram added, “The worst consequence has been the complete breakdown of trust between the Centre and the States. VAT earlier and GST later were introduced on the basis of mutual trust and to promote cooperative federalism. But the manner in which the GST laws were passed and, worse, the manner in which they are being administered have deepened the distrust between the Centre and the States. There is no real consensus in the meetings of the GST Council. The skewed formula on voting rights of the Centre and the States has been used by the Centre to push through decisions that are bitterly opposed by the States including, privately, by BJP-ruled States.”
Issue of Compensation Cess
Former Finance Minister P Chidambaram stated, “The holding back of the arrears of Compensation Cess and the excessive resort to cesses (rather than shareable taxes) has increased the chasm between the two sides. Despite the promise in 2017, no state has achieved an annual revenue growth of 14 per cent. The States have filled the gap through the Compensation Cess but, in two years, owing to a shortfall in the Compensation Cess, the gap was filled through a back-to-back loan. The states were forced to accept the arrangement against their will, further deepening the distrust and adding to the state’s debt burden.”
“The delaying of fiscal transfers to the States during the Covid-19 pandemic when they needed it the most came as a shock. The States, collectively, have felt betrayed by the Centre and several finance ministers have expressed their regret and anguish publicly. Some of them have gone to the extent of demanding a re-think on GST. Congress will administer the law in a manner that the GST revenues will be shared fairly and equitably between the Centre and the States and in a manner that will promote the growth of business, especially small businesses, and bring back the lost jobs,” Chidambaram concluded.