The Goods and Services Tax (GST) Council’s decision to reduce four tax slabs to two has triggered sharp political reactions. While the government projected the overhaul as a long-pending reform, the opposition, led by Congress, accused the ruling party of complicating the system and acting too late.
Opposition’s sharp criticism
Congress chief Mallikarjun Kharge said the Centre has twisted the idea of “one nation, one tax” into “one nation, nine taxes.” He pointed to special rates of 0.25, 1.5, 3 and 6 per cent, which remain outside the main slabs of 5 and 18 per cent.
Senior leader P Chidambaram, a four-time Union Finance Minister, posted on X that the changes, though welcome, came “eight years too late.” He said Congress had consistently opposed the complicated GST structure and suggested political and economic compulsions may have pushed the Centre to act now.
Tamil Nadu Finance Minister Thangam Thennarasu warned of potential revenue losses for states and suggested either extending the cess system or hiking taxes on luxury goods.
Leaders of Shiv Sena (UBT) and Trinamool Congress also echoed concerns but cautiously welcomed some of the corrections. TMC MP Mahua Moitra highlighted that Chief Minister Mamata Banerjee had flagged the issue of GST on health and life insurance last year.
Centre and allies defend move
The government said the rationalisation is based on eight years of data and would make the GST system simpler and more efficient. Union Minister of State for Finance Minister Pankaj Chowdhury insisted the changes were “the need of the hour” and described them as a “Diwali gift” aimed at easing the burden on citizens, farmers, and the middle class.
Allied parties including the JD(U) and TDP supported the decision, calling it a “pro-poor and growth-oriented” step. JD(U) spokesperson Rajeev Ranjan described it as a “bumper gift” ahead of the festive season.
What changed in GST
The Council has removed the 12 per cent and 28 per cent brackets, leaving only 5 per cent and 18 per cent as the main slabs, which together contribute nearly 74 per cent of GST revenue. A special 40 per cent “sin tax” on luxury goods remains.
While the Centre hopes the reforms will boost consumption and ease compliance, the opposition remains sceptical, dubbing the revision “GST 1.5” and questioning if it will truly benefit MSMEs and the public.