Congress president Rahul Gandhi’s ‘Gabbar Singh’ barb at the Modi government for its Goods and Services Tax (GST) may backfire.
Rahul has been accusing the Centre of implementing a flawed GST that has inconvenienced small traders and common people alike. However, when the central government moved a proposal to move several items from the 28 per cent GST slab to a lower tax slab, the Opposition objected the move.
Government sources present in the meeting said the Congress and Opposition parties resisted the proposal to lower GST rates on several items during the 31st GST council meet on Saturday.
A BJP leader, who is member of the GST council, said, “We want to know who the Gabbar Singh is now. This is doublespeak by the Congress and other Opposition parties. In public, they have been demanding that the high tax slab of 28 per cent must be abolished and all commodities should be moved to lower tax slabs. But in the GST council meet, Congress, the Trinamool Congress, the CPI(M) and the Aam Aadmi Party opposed the Centre’s move.”
The council eventually moved six items from the 28 per cent tax bracket to lower tax brackets.
Earlier, there were 34 items in the 28 per cent tax slab. This included both luxury and sin goods.
Union Finance Minister Arun Jaitley on Saturday said, “The GST rate reduction will have an overall impact on revenue of Rs 5,500 crore.”
The items that were brought down from the 28 per cent tax slab include parts for carriages for disabled persons, power banks of Lithium ion batteries, video games and small sports related items.
High drama in GST Council meet
But the final decision of the council was not without drama. When officials moved the tax reduction proposals made by the fitment committee that has been studying which commodity should be placed in which tax bracket, Kerala Finance Minister Thomas Isaac was the first one to protest, sources said.
He reportedly said that there must be no reduction in taxes on any commodity and that the “time was not right for reduction in GST tax slabs”.
Isaac was backed by Puducherry Chief Minister V Narayansamy, who also holds the finance portfolio.
Sources said Karnataka Finance Minister too supported the stand taken by Isaac. West Bengal Finance Minister Amit Mitra also opposed the government’s move to cut tax slabs. He said this was an “inappropriate moment” to do it.
Sources present in the meeting said the Aam Aadmi Party also supported this demand. Punjab Finance Minister Manpreet Badal, a Congress leader, is said to have maintained a neutral stand.
The three newly formed Congress governments in Rajasthan, Madhya Pradesh and Chhattisgrah did not send their finance ministers to the GST council meet. Rajasthan and Chhattisgarh sent officials while MP did not send anyone.
A finance minister of a BJP-ruled state told India Today TV: “The demand for withholding the tax cut by Congress and other Opposition parties in the GST council meet completely flies against the stand taken by them in public.”
Irked over the opposition for reduction in tax slabs, the NDA leaders accused them of doublespeak. Bihar Finance Minister Sushil Modi and his counterpart in Assam, Himanta Biswa Sarma, said the stand taken by these states in the GST council meet must be recorded and included in the minutes of the meeting.
The Opposition parties, however, agreed to rate cut at the end without going for a vote, something which hasn’t happened till now in the council meets.
Speaking to India Today TV, a finance minister of an Opposition-ruled state said the central government was bringing down items to lower tax slabs only with an eye on the upcoming Lok Sabha elections.
“The BJP hopes this move will bring political dividend. High tax slabs for several commodities and compliance issues faced by traders have created a negative sentiment against the BJP and the GST,” he said.