Prime Minister Narendra Modi on Tuesday made a massive announcement with regards to GST that is likely to go a long way towards silencing the opposition over its persistant attacks on the government over the historic tax reform.
Delivering the keynote address at the inaugural Republic TV Summit, the Prime Minister said that India was arriving at a situation where almost 99% of goods and serviced can be brought under a tax rate of 18%. He added that the result of this change would be that the only a minuscule percentage of luxury items (generally known as sin items) would have a higher tax rate.
"We have reached a point where 99% things will be brought under 18% GST charges. We are heading towards a direction where only minimum items will be under the slab of more than 18% which all also be only luxurious products. I will make sure that GST will be made simple or easier. I and my government will ensure that we see and fulfill bigger dreams," the Prime Minister asserted.
The change in the GST structure, especially with just months to go before the all-important 2019 Lok Sabha elections, apart from decreasing the tax burden on the end users, also takes away the major pain point that the opposition had insisted on flagging about GST -- that with four tax slabs, it was too complex. As recently as his news briefing following the recent assembly election results, Congress president Rahul Gandhi had taken on the government over this, and even at the Republic Summit right after the Prime Minister spoke, in another panel discussion Praful Patel and former J&K CM Farooq Abdullah rounded on Union Minister Piyush Goyal on GST by criticising its implementation.
For the entirity of the time since GST was rolled-out effectively unifying the country into one market, the government has maintained that it was a work in progress and that they are constantly speaking to stakeholders, especially the various states in order to streamline the goods and services tax. On the other hand, a political campaign had been carried out by the opposition attacking the GST by labelling it with acronyms such as 'Gabbar Singh Tax'. This was met with various ministers extolling its benefits, namely by using a counter-acronym, 'Good and Simple Tax' -- which it is on the way to being with the latest announcement and which also means that just like in the Rafale deal case, the Opposition has lost one of its main topics of attack.