How Can Congress Ensure GST Rate Cuts Benefit Consumers?
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Synopsis
In a recent call to action, Congress General Secretary Jairam Ramesh emphasizes the need for a mechanism to guarantee that consumers benefit from GST rate cuts. With support from eight opposition-ruled states, the party aims for fiscal autonomy and reform to enhance cooperative federalism. Will this lead to substantial change?
Key Takeaways
- Congress demands a mechanism to ensure GST rate cuts benefit consumers.
- Eight opposition-ruled states support the proposed GST reductions.
- Compensation for states is crucial to mitigate revenue losses.
- Extra levies on luxury goods should be devolved to states.
- ‘GST 2.0’ aims to simplify compliance for MSMEs.
New Delhi, Aug 30 (NationPress) Congress General Secretary responsible for Communications, Jairam Ramesh, on Saturday called for a systematic approach to guarantee that the advantages of GST rate reductions are effectively transmitted to the consumers.
He highlighted that eight states governed by the Opposition -- Karnataka, Himachal Pradesh, Jharkhand, Kerala, Punjab, Tamil Nadu, Telangana, and West Bengal -- have expressed their backing for the anticipated decrease in GST rate slabs and lower rates for commonly used items.
Addressing the fiscal consequences for states, Ramesh asserted that compensation should be allocated to all states for a duration of five years, using 2024-25 as the baseline year, as state revenues are likely to decline due to reduced GST income.
Additionally, he contended that any extra charges on so-called ‘sin’ and luxury products, exceeding the suggested 40 percent ceiling, should be completely transferred to states. Currently, he pointed out, the Centre collects nearly 17-18 percent of its income from various cesses and surcharges, none of which are shared with state governments.
“These requests are entirely reasonable and are endorsed by recent studies released by the Union Finance Ministry’s own think tank, the National Institute of Public Finance & Policy (NIPFP),” Ramesh remarked.
The senior Congress figure reiterated the party’s enduring call for a ‘GST 2.0’ -- a reform aimed at not only simplifying rate slabs and lowering rates but also easing compliance processes, especially for micro, small, and medium enterprises (MSMEs), which he described as being excessively burdened by the current framework.
Ramesh emphasized that the Congress has consistently advocated for protecting the fiscal autonomy and interests of states.
“It is crucial that the upcoming GST Council meeting does not devolve into yet another headline-grabbing event, a common occurrence under the Modi government, but instead becomes a chance to genuinely fortify cooperative federalism in both its essence and practice,” he stated.
Point of View
It is essential to recognize that the Congress party's demands for a systematic approach to ensure consumers benefit from GST rate cuts highlight a significant issue in fiscal governance. While the call for a more structured cooperative federalism is vital, the broader implications on state revenues and economic stability must be carefully assessed. The focus remains on ensuring that consumer interests are prioritized without compromising state fiscal health.
NationPress
30/08/2025
Frequently Asked Questions
What is the Congress party's stance on GST rate cuts?
The Congress party, led by Jairam Ramesh, is advocating for a mechanism to ensure that consumers benefit from GST rate cuts, supported by several opposition-ruled states.
How many states support the proposed GST reductions?
Eight opposition-ruled states, including Karnataka, Himachal Pradesh, Jharkhand, Kerala, Punjab, Tamil Nadu, Telangana, and West Bengal, are backing the proposed GST rate reductions.
What fiscal measures did Ramesh propose?
Ramesh proposed that compensation be provided to all states for five years due to expected revenue losses from lower GST collections.
What is 'GST 2.0'?
'GST 2.0' refers to a reform initiative aimed at simplifying GST compliance for micro, small, and medium enterprises while streamlining rate slabs.
What is the significance of the upcoming GST Council meeting?
The upcoming GST Council meeting is seen as a crucial opportunity to foster genuine cooperative federalism and address the demands raised by the Congress party.
