Congress on Thursday slammed the government after Union Finance Minister Nirmala Sitharaman on Wednesday announced rate cuts saying even before the GST Council meeting, the Prime Minister had already proclaimed the substance of its decisions in his Independence Day speech of August 15 and asked is the GST Council to be reduced to a formality.
Jairam Ramesh said that the Union Finance Minister has finally recognised that GST 1.0 had reached a dead end and in fact, the very design of GST 1.0 was flawed and this had been pointed out by the Congress way back in July 2017 itself, “when the Prime Minister had made one of his typical U-turns and decided to introduce GST”.
Congress general secretary and communication incharge Jairam Ramesh in a post on X, said, “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, minimises evasion, mis-classification, 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 said, “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?”
Taking a swipe at the government, Ramesh, who is also the Rajya Sabha member said that 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 Supressing Tax,” he claimed.
The Congress leader also stated that last evening’s announcements have certainly made headlines since the Prime Minister 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,” he said.
He also said that 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.
Even senior Congress leader Manickam Tagore slammed the government saying that the governmentnimposed the “Gabbar Singh Tax” for eight yearrs drowning sma traders, .SMEs, farmers and middle class.
In a post on X, Tagore, who is Andhra Pradesh incharge said, “For eight years, the Modi ji government imposed the Gabbar Singh Tax, drowning small traders, MSMEs, farmers, women, and middle-class Indians in confusion and burden.”
Hitting back at the government, Tagore said, “Now, suddenly, they tout “Next-Gen GST reforms. Where were these reforms when millions suffered?”
Tagore, who is a Lok Sabha MP from Tamil Nadu’s Virudhu Nagar said, “Leader of Opposition Rahul Gandhi was raising these issues back in 2025, saying the GST wasn’t a reform but a ‘brutal tool of economic injustice and corporate cronyism’. It was designed to punish the poor, crush MSMEs… and benefit a few billionaire friends of the Prime Minister.”
Taking a pot shot at the government over the GST, the Congress leader said, “Remember his fire? India deserves a tax system that works for all… so that every Indian, from the small shopkeeper to the farmer, can be a stakeholder in our nation’s progress.”
“Rahul Gandhiji ‘s vision? A GST 2.0—a single, moderate rate, an end to cess-raj, relief for the poor, equitable federal sharing, and taxpayer-friendly reforms. All detailed in the Congress Manifesto 2024,” he highlighted.
Taking a dig at Sitharaman, he said, “By contrast: what did failed FM Nirmala Sitharaman offer? She called GDP slumps an ‘Act of God’ and refused to own up to the havoc caused by a ‘flawed GST’ and a ‘failed lockdown’. Her idea of reform: reduce GST slabs after 8 years, but only under intense political pressure.”
“Let’s be clear Rahulji had it right all along. Congress’s GST overhaul was people-centric: single rate, fewer cess-surcharges, autonomy for states, relief for MSMEs, and no GST on agricultural inputs. That’s called responsible governance. Not piecemeal PR stunts,” he said.
“So, after 8 years of pain, Modiji finally wakes up—only when political winds turn? Next Gen GST isn’t Modi’s vision—it’s actually Congress Vision from 2024.
Welcome back to the conversation—but India’s small shopkeepers, farmers, women, and MSMEs haven’t forgotten,” Tagore added.
The remarks from Congress leaders came after Sitharaman on Wednesday announced GST rate cuts, saying that with the two-tier tax rate system approved, the common man will benefit greatly.
The GST Council approved the two-tier rate structure of five per cent and 18 per cent from the existing four-tier GST framework — 5, 12, 18 and 28 per cent.
The GST rate rationalisation will be implemented from September 22.
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Sofia Babu Chacko is a journalist with over five years of experience covering Indian politics, crime, human rights, gender issues, and stories about marginalized communities. She believes that every voice matters, and journalism has a vital role to play in amplifying those voices. Sofia is committed to creating impact and shedding light on stories that truly matter. Beyond her work in the newsroom, she is also a music enthusiast who enjoys singing.
