New GST Rates: Does Congress Want Gutkha Taxed At 5%? Nirmala Sitharaman's Swipe At Opposition Criticism

(MENAFN- Live Mint) New GST Rates: Finance Minister Nirmala Sitharaman took a swipe at the Congress party for criticising the special 40 per cent tax slab on luxury items like high-end cars, tobacco, and cigarettes on Wednesday after she announced a major cut in Goods and Services Tax (GST) rates on essential goods, cars, farm equipment, and electronics.

The GST rate cut move is being seen as a major reform aimed at providing relief to households, businesses, and the healthcare sector. The GST Council has simplified tax rates by limiting them to 5 per cent and 18 per cent, effective 22 September. A special 40 per cent rate will apply to luxury items like high-end cars and tobacco and cigarettes.

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During the press conference on Wednesday night, when it was pointed out that some in the Opposition have questioned the special 40 per cent slab, Sitharaman took a swipe at the Congress.

'Does the Congress party want tobacco and gutkha to be taxed at just 5 per cent GST? I fail to understand this. During their tenure, the Congress party believed implementing GST was impossible because states didn't trust the central government. That's why they couldn't implement it," Sitharaman responded.

"I do not know what word I should use for the Congress. They should make up their mind whether they want to oppose it or support it," she added.

A video clip of Sitharaman's response was later shared on X by the office of the Finance Minister.

“We have implemented the GST and are also doing second-generation reforms under the leadership of Hon'ble Prime Minister Narendra Modi so that people get relief on their day-to-day items,” read the post tagging the prime minister.

Sitharaman said tobacco, gutka, tobacco products, and cigarettes will continue to be charged at the current 28 per cent plus a compensation cess until loans taken to pay states for revenue loss are fully paid back.

Gabbar Singh Tax: Rahul Gandhi

India adopted the GST in 2017, sweeping in more than a dozen domestic state taxes in a bid to unify the economy on the principle of "one nation, one tax, one market". It was hailed as the biggest tax reform since independence from Britain in 1947.

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The new system had four tax slabs, of 5 per cent, 12 per cent, 18 per cent and 28 per cent, with scores of goods in each category. An additional levy was imposed above the tax of 28 per cent on some items, such as cigarettes, luxury cars and high-end motorcycles.

Rahul Gandhi, the leader of the Opposition in the Lok Sabha , has often dubbed the GST the Gabbar Singh Tax .

Prime Minister Modi announced the sweeping changes to the complex GST regime during his Independence Day speech on 15 August.

The Congress party has reacted to PM's I Day announcement, saying, finally, the prime minister has understood that "as long as these changes are not introduced and there is no substantial increase in consumption and spending, the process of development will not accelerate.”

“For the last 18 months the Indian National Congress has been demanding fundamental changes into the Goods and Services Tax 2.0,” Congress MP Jairam Ramesh said in a statement.

'8 years too late'

Senior Congress leader P Chidambaram welcomed the Centre's recent GST rationalisation and rate cuts but criticised the move as being "8 years too late".

In a post on X, Chidambaram, the former Union Finance Minister , said the current GST design and rates should not have been introduced in the first place, adding that the opposition had repeatedly warned against these issues for years, but their pleas were ignored.

On Thursday, a day after the announcement of GST reform, another Congress leader, Pawan Khera , asked, 'When they finally have to follow Rahul Gandhi's advice, why do they take so much time in doing that?'

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Khera shared screenshots of Gandhi's previous posts in which he said, "as an indirect tax affects rich and poor alike, I urge GST council to keep the rate at 18 per cent or lower so that the poor are not unduly burdened."

Does the Congress party want tobacco and gutkha to be taxed at just 5 per cent GST? I fail to understand this.

(With agency inputs)

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