On Saturday, Finance Minister Nirmala Sitharaman forcefully responded to the criticisms by the Opposition against the Goods and Services Tax (GST) framework by accusing them of misguiding the nation. She explained that it was not the Bharatiya Janata Party (BJP) doing but actually the collective decision of the Empowered Committee of state finance ministers, which had all the parties represented in it.
In solving the problem, Sitharaman emphasised that the Opposition was not correct by choosing to criticise the BJP on decisions that were actually made by all in the process of developing the GST system. She made it clear that the GST Council, consisting of central and state representatives, operates under the model of consensus, and the BJP does not alone control tax arrangements.
Sitharaman clarified that recently, a new structure was approved by the GST Council, and this will come into effect starting on September 22. Below this, a two-tier system of 5% tax and 18% tax has been determined, as well as a further 40% tax slab strictly covering sin goods and luxury goods. The shift is to streamline the system of indirect taxes and to increase the taxation of goods which are perceived as dangerous or unnecessary.
Previously, GST was a four-rate tax system of 5, 12, 18 and 28. The new amendment, as the finance minister puts it, is a move towards rationalisation of the structure and harmonisation with global practices alongside a balance in state revenues.
Sitharaman’s comments are in reaction to the arguments raised by the Opposition that the BJP arbitrarily enacted complex tax slabs, which put a strain on ordinary citizens. She rejected these claims, saying that GST reforms were not made by one state alone but through the decision of all the states. Her pronouncement emphasised the importance of having political parties state the facts in the right manner instead of using GST to carry out misinformed stories.
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