Congress rebuttal to Modi's GST-driven 'early Diwali' party: 10 key points

Union Finance Minister Arun Jaitley and Revenue Secretary Hasmukh Adhia (L) at the 22nd meeting of the Goods and Services Tax (GST) council in New Delhi. (Photo: PTI)
While Prime Minister Narendra Modi described the measures taken by his government on the Goods and Services Tax (GST) as Diwali come early, the Opposition Congress on Saturday, while welcoming the move, called it "interim relief to certain sections" and accused the government of failing to address the structural issues of GST reform.

"We welcome the interim relief... The government has utterly failed to address structural issues of GST reform through fair and transparent consultations," Congress spokesperson Randeep Singh Surjewalal told the media at the party headquarters in New Delhi. 

The Congress' criticism came as the Prime Minister was on a two-day visit to Gujarat. Terming it an 'early Diwali', PM Modi looked to assuage dissent among small and medium enterprises in poll-bound Gujarat by lauding the government’s move to revise the GST measures in his public address at Dwarka on Saturday. (Read more about what PM Modi said in Dwarka)

Facing severe criticism over the implementation of GST, the government on Friday announced a slew of measures to ease the concerns of traders, exporters and small business while slashing the rates on 27 items of common consumption, including namkeens, stationery, man-made yarn -- with most of them brought to five per cent category. (Read more about the measures announced on GST)

Here are the points raised by the Congress: 

1) GST's purpose undermined: Surjewalal said the entire spirit, direction, and purpose of the GST Bill introduced by the United Progressive Alliance (UPA) under Congress was lost due to the sheer incompetence of a panic-stricken Modi government driven by "adhocism and lost in chaos of its own making".

"Post-demonetisation disaster, a possible 'good fortune' of adding two per cent to India's GDP is being converted into 'misfortune' by sheer ineptitude and amateurish handling of the most important tax-reform," Surjewala said.

2) BJP refusing to see the truth: Accusing the Bharatiya Janata Party (BJP) of first refusing to acknowledge the clutter, confusion, and cost to the economy by botching up the GST conception and implementation, the Congress said that reality dawned with the massive economic downslide. 

3) Rates too many and too high: "One Nation, One Tax has become 'One Nation, Seven Taxes' or more, i.e. 0.25 per cent, three per cent, five per cent, 12 per cent, 18 per cent, 28 per cent and 40 per cent," Surjewalal said, adding, "Indian GST rate is now the highest in the entire world. Even the Chief Economic Advisor to this government had recommended the GST rate of 15 per cent to 15.25 per cent as the revenue neutral rate." 

In addition, states have the discretion to impose more taxes over and above the GST, the Congress leader said, adding that a case in point being the entertainment tax imposed by Tamil Nadu and registration tax imposed by Maharashtra. "The Prime Minister (Narendra Modi) and the Finance Minister (Arun Jaitley) have failed to address this principal structural flaw," he added. 

4) Govt hasn't moved on petrol, power: The Congress leader said that the government has still not laid down any roadmap nor given any indication of bringing petroleum products, electricity and real estate within the ambit of GST. "It may be worth noting that the government continues to earn a bonanza tax of Rs 2,73,000 crore annually from cumbersome petro taxes alone," he said.

5) Against the common man: The Congress leader also took on the government accusing it of putting massive taxes on goods of mass consumption. "No relief has been given to the common man. Modi government's circumspect motives in taxing all aspects of 'Roti, Kapda, and Makaan' continue unabated," he said.

6) Anti-farmer govt: Describing the BJP government as anti-farmer, the Congress leader said that non-grant of any relief to this sector, which is the biggest employment generator, reflects inherent prejudice of the Modi government. "Reeling under the lack of market-driven MSP and cycle of indebtedness, no relief has been given to the farmer and agriculture sector from burden of taxes. Fertilisers, tractor and all other agricultural implements, pesticides and even the cold storages and food grain handling systems are being highly taxed," Surjewala said.

7) Textiles suffering too: Surjewalal said that textiles, the second biggest employment generator after agriculture, also continues to face deep stress owing to distorted duty structure threatening to wipe out the living subsistence of millions of traders, cloth merchants, and micro, small and medium businesses.

8) Too little, too late: Reacting to the measures announced after the GST Council meeting, Surjewala on Friday had tweeted: "Too little, too late. Procedural reliefs will not compensate for messing with the basic architecture of GST by Modi Government." (Read nore here)

9) Fuel taxes: On its twitter handle, the Congress also said, "Ironic that government has brought an anti-profiteering bill, but it itself indulges in profiteering with fuel taxes."

10) Simplifying regime critical for economy: The party said the reduction in the number of slabs and complexity of the GST regime were yet to be addressed and these were critical for the economy's long-term health.

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