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GST regime: Modi hails it, Rahul blames it amid debate over country’s economy

The BJP and Congress are locked in a direct fight in Gujarat and Himachal Pradesh, which are scheduled to go to the polls later this year.

india Updated: Oct 07, 2017 19:03 IST
HT Correspondent
HT Correspondent
Hindustan Times, Dwarka/Mandi
GST,Modi,Rahul Gandhi
PM Narendra Modi (left) said Diwali had come early after the GST council revised tax rates for 27 items. However, the Congres vice president Rahul Gandhi (right) slammed the government’s new tax regime, saying it slowed down the growth rate.(HT File Photo)

Prime Minister Narendra Modi and Congress vice-president Rahul Gandhi squared off on Saturday over India’s uniform national tax regime that rolled out to teething problems three months ago which the government has moved to fix.

At a rally in Gujarat, Modi hailed the tax rate cuts of 27 items under the Goods and Services Tax (GST) announced on Friday and said the changes would boost small and medium businesses. “Today, I have seen newspapers from across the country. They carry headlines that Diwali has come 15 days early,” the Prime Minister said in Dwarka after inaugurating a bridge.

Hours later in Himachal Pradesh, Gandhi hit back at the government, blaming the GST rollout and Modi’s economic policies for unemployment. “The Congress had proposed GST maximum limit at 18% but the Modi government fixed it 28%. Small and medium businesses won’t be able to pay such a huge tax,” he told a crowd in Mandi.

The BJP and Congress are locked in a direct fight in Gujarat and Himachal Pradesh, which are scheduled to go to the polls later this year.

The GST subsumed a string of state levies and taxes and stitched together a uniform national market but has faced a bumpy ride after a midnight launch on July 1, especially on account of complex monthly tax-filing processes that is said to have caused hassles to shopkeepers and small businesses.

Responding to the concerns on Friday, the federal indirect tax body, the GST council, lowered the rates on 27 items – including Khakra, unbranded namkeen, man-made yarn and unbranded ayurvedic medicine – and announced a slew of rule changes, such as quarterly filing of returns for businesses with sales of up to Rs 1.5 crore.

The changes are expected to boost exporters and help small businesses, who are key to a revival of the economy, which clocked its slowest growth rate in three years last quarter.

The Opposition, especially the Congress, has repeatedly blamed the government’s handling of the GST for the economic slowdown and unemployment. In meetings in Uttar Pradesh’s Amethi this week, Gandhi had repeatedly highlighted the state of the economy and even dared the Prime Minister to resign and install a Congress government if the situation didn’t improve.

But in Dwarka, Modi defended his government and said he had assured of remedies in areas of management, rules and technology if the business class complained about GST.

“We do not want the country’s business class to get caught in red tapism, files, bureaucracy, I will never want this,” Modi said. “I am thankful to the people of the country for the way they have welcomed our effort to make simple tax simpler.”

The textile industry, especially retailers, had threatened not to light any lamps this Diwali, if GST slabs were not revised. The latest changes introduced in the new tax regime are likely to calm down sentiments of businessmen, who form a potent vote base for the BJP that is aiming to continue a two-decade rule in the state.

First Published: Oct 07, 2017 18:52 IST