Congress’ dual attack on BJP: Rahul rakes up Jay Shah in HP. FMs target Modi on GST

GST offensive

Meanwhile, ahead of the GST Council meeting, finance ministers of Congress-ruled states launched an offensive against the government seeking nothing less than a major overhauling of the tax regime. Calling it a big disappointment, finance ministers from Punjab, Karnataka and Puducherry claimed that GST has turned the clock back by a few decades.

“It is surely a case of poor implementation on all fronts: concept, design, tax rates, exemptions, compliance requirement and technological preparedness. As a result there is mammoth confusion all around, with harassed taxpayers running for cover, government going for quick fixes in the wake of forthcoming elections, and the business community nearly unanimous that the government has frittered away a huge opportunity with non-seriousness and ill-preparedness matched only by excessive sloganeering,” read a statement released by these ministers.

Speaking to the media, these ministers claimed that the GST has been introduced in undue haste causing huge damage both to government revenues and economic activity. According to them, GST has turned out to be the “biggest destroyer of the Indian economy” for which successive generations will pay a price beyond redemption. “It requires an urgent and holistic fix. Nothing less will do.”

Punjab's Finance Minister Manpreet Badal, who had earlier claimed that the government has finally started paying heed to the demands of the Opposition after Yashwant Sinha's criticism, said, “The present GST system will make us tread the path of ruin, not resurgence. Unless it is amended, India can’t be a superpower. Congress' single rate GST was an opportunity. BJP mutilated GST and with it caused economic crisis,” he said.

Seeking a simplified GST, he added how four months ago the ruling party told Congress that not a comma within GST would be changed. “However, Gujarat elections changed that,” he said. Meanwhile, Krishna Byre Gowda, Karnataka's Finance Minister raised the issue of GST Network and claimed that they were informed how GST would lead to GDP growth of 2%. “Much the opposite happened five months after BJP's mismanagement,” he said.

These ministers highlighted how Indian GST rate is the highest in the world despite the fact that most countries start with uniform GST rate of a single digit or at the most below 15% or at worst 18-20%. They pointed that government’s own CEA advocated a mean tax rate of 15.5% or at most two rates, with higher not exceeding 18%. According to them, the government has jettisoned the report of its own advisor and gone for GST rates of 50% that are unheard of anywhere except on goods like tobacco and alcohol.

In order to gain maximum political mileage over GST, the grand old party will field former Prime Minister Manmohan Singh for a one-day campaign in Gujarat where he is likely to speak about the ill-effects of GST and demonetisation. Moreover, Gandhi will resume his Gujarat campaign from 11 November and will visit north Gujarat for a three-day campaign which will begin from Gandhinagar.

Meanwhile, hoping for a Gujarat like response from people of Himachal Pradesh over GST, the Congress vice president continued to attack the prime minister over what he refers to as Gabbar Singh Tax. Only time will tell whether an attack on GST will cut much ice with people of the hilly state as much as it did with the Gujaratis. For now, Congress seems to be on a sticky wicket in Himachal with BJP clearly leading the race.