Congress demands mechanism to ensure GST rate cuts benefit consumers

New Delhi, Aug 30 Congress General Secretary in charge of Communications Jairam Ramesh on Saturday demanded a mechanism to ensure that the benefits of GST rate cuts are passed on to the consumers.

He said eight Opposition-ruled states -- Karnataka, Himachal Pradesh, Jharkhand, Kerala, Punjab, Tamil Nadu, Telangana, and West Bengal -- have extended their support to the proposed reduction in GST rate slabs and lower rates for items of mass consumption.

Pointing to the fiscal implications for states, Ramesh said that compensation should be provided to all states for a period of five years, with 2024-25 taken as the base year, since state revenues would inevitably take a hit from lower GST collections.

He further argued that additional levies on so-called ‘sin’ and luxury goods, beyond the proposed 40 per cent ceiling, must be entirely devolved to states. At present, he noted, the Centre garners nearly 17-18 per cent of its revenues from a variety of cesses and surcharges, none of which are shared with state governments.

“These demands are perfectly legitimate and are supported by recent papers published by the Union Finance Ministry’s own think tank, the National Institute of Public Finance & Policy (NIPFP),” Ramesh said.

The senior Congress leader reiterated the party’s long-standing demand for a ‘GST 2.0’ -- a reform that not only streamlines rate slabs and reduces rates but also simplifies compliance procedures, particularly for micro, small, and medium enterprises (MSMEs), which he described as being overburdened by the current system.

Ramesh underlined that the Congress has consistently stressed the need to safeguard the fiscal autonomy and interests of states.

“It is essential that the GST Council meeting scheduled for next week does not turn into yet another headline-grabbing exercise, so typical of the Modi government, but instead becomes an opportunity to strengthen genuine cooperative federalism in both letter and spirit,” he said.

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