New Delhi: Congress MP Jairam Ramesh on Thursday questioned the role of the GST Council, asking whether it has been reduced to a mere “formality.” He cited Prime Minister Narendra Modi’s prior announcements regarding tax reforms during his August 15 Independence Day speech as the basis for his observation.
The Congress leader pointed out that the Union Finance Minister made major announcements following the GST Council meeting; however, the key decisions had already been proclaimed by PM Modi in his speech.
In a tweet posted on ‘X’, Jairam Ramesh wrote, “The Union Finance Minister has made major announcements last evening after the meeting of the GST Council, which is a constitutional body. However, even before the GST Council meeting, the Prime Minister had already proclaimed the substance of its decisions in his Independence Day speech of August 15th, 2025. Is the GST Council to be reduced to a formality?”
Ramesh emphasized that the Congress party has long been advocating for GST reforms aimed at reducing prices and tax rates on many widely consumed items. He added that these reforms would ease the compliance burden on MSMEs and expand GST coverage.
“The Indian National Congress has for long been advocating for a GST 2.0 that reduces the number of rates, cuts the rates on a large number of items of mass consumption, minimizes evasion, misclassification, and disputes, does away with inverted duty structure (lower tax on output as compared to inputs), eases the compliance burden on MSMEs, and expands GST coverage,” he stated.
He also noted that the Congress party had flagged structural flaws in the GST system when it was implemented in 2017. Jairam Ramesh mentioned that the Finance Minister has acknowledged that GST has reached a “dead end.”
He remarked, “Faced with a lack of buoyancy in private consumption, subdued rates of private investment, and endless classification disputes, the Union Finance Minister has finally recognised that GST 1.0 had reached a dead end. In fact, the very design of GST 1.0 was flawed and this had been pointed out by the INC way back in July 2017 itself, when the PM had made one of his typical U turns and decided to introduce GST. It was meant to be a Good and Simple Tax. It turned out to be a Growth Suppressing Tax.”
Looking ahead, Ramesh expressed that the wait for a genuine GST 2.0 reform will continue, even as the recent reforms are expected to benefit consumers. He also highlighted the importance of the states’ demand for an extension of compensation for another five years to protect their revenues.
“Last evening’s announcements have certainly made headlines since the PM had already laid down the pre-Diwali deadlines. Presumably, the benefits of rate cuts will be passed on to consumers. However, the wait for a true GST 2.0 continues. Whether this new GST 1.5, if it can be called that, stimulates private investment—especially in manufacturing—remains to be seen. Whether this will ease the burden on MSMEs, time alone will tell.
Meanwhile, one key demand of the states made in the true spirit of cooperative federalism—namely, the extension of compensation for another five years to fully protect their revenues—remains unaddressed. In fact, that demand assumes even greater importance now,” he added.
In a significant simplification of the GST regime aimed at benefiting the common man, Finance Minister Nirmala Sitharaman on Wednesday announced the consolidation of the 12% and 18% GST slabs into a dual rate structure of 5% and 18%, along with a 40% rate on sin goods.
This simplification is part of the “Next-Generation GST” reform initiative, which is designed to boost affordability, consumption, and economic efficiency.
Items on which GST has been reduced to 5% include hair oil, toilet soaps, soap bars, shampoos, toothbrushes, toothpaste, bicycles, tableware, kitchenware, and other household articles.
GST on ultra-high temperature milk, chena, and paneer has been reduced from 5% to zero. Additionally, all Indian breads—including roti and paratha—will now be available at a nil GST rate.
The GST rate has also been reduced from 12% or 18% to 5% on various food items such as namkeen, bujjiya, sauces, pasta, instant noodles, chocolates, coffee, preserved meat, cornflakes, butter, and ghee.
(Note: Except for the headline, this article has not been edited by FPJ’s editorial team and is auto-generated from an agency feed.)
https://www.freepressjournal.in/india/reduced-to-formality-congress-mp-jairam-ramesh-questions-gst-councils-role-after-tax-reforms
