Congress Criticises Government’s GST Reform, Says True GST 2.0 Reform in India Still Awaited

New Delhi: The Congress party today strongly criticised the government’s recently announced Goods and Services Tax (GST) reforms, calling them minor adjustments to a “broken system” rather than the long-promised structural overhaul. Senior Congress leader Jairam Ramesh said the measures may provide some short-term festive season relief, but fall short of what India needs in terms of deep economic reform.

Ramesh, in a statement on X, accused the government of ignoring the key elements required for a comprehensive tax transformation and said the wait for GST 2.0 continues.

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…

— Jairam Ramesh (@Jairam_Ramesh) September 4, 2025

Congress Demands Genuine GST 2.0 Reform in India

Jairam Ramesh reiterated that the Congress has consistently advocated for a GST 2.0 reform in India that would rationalise the number of tax rates, reduce levies on mass-consumption goods, and simplify compliance, particularly for MSMEs. He added that a true reform must address inverted duty structures, cut down on disputes, and widen GST coverage across sectors.

He stressed that these goals remain unmet despite the latest announcements. Instead, the measures appear to be superficial adjustments aimed at gaining temporary public approval ahead of the festive season.

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Criticism of Government’s Process and PM’s Role

The Congress leader also took aim at the way decisions were revealed. He pointed out that the Prime Minister had already outlined the substance of the GST Council’s decisions in his Independence Day speech on August 15, 2025, well before the constitutional body met. “Is the GST Council to be reduced to a mere formality?” Ramesh asked, questioning whether the Council was functioning independently.

GST 1.0 Called a Flawed Design

Ramesh recalled that the Congress had flagged the flaws in the original GST framework as early as July 2017. He described GST 1.0 as a “deeply flawed” design that turned into a Growth Suppressing Tax rather than the “Good and Simple Tax” it was meant to be.

He said that the government, faced with low private consumption, subdued private investment, and frequent classification disputes, has finally realised that GST 1.0 had “reached a dead end.”

Future of States’ Revenues and True Reform

Ramesh said while the latest announcements may generate headlines and possibly pass on benefits of rate cuts to consumers, they cannot be considered transformative. He described the measures as “GST 1.5 at best” and questioned whether they would actually stimulate private investment, particularly in manufacturing, or ease burdens on MSMEs.

He also flagged that a key demand of states for the extension of compensation for another five years to safeguard revenues in the spirit of cooperative federalism was left unaddressed. According to him, this demand has become even more critical now.

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