“One Nation, One Tax” became “One Nation, 9 Taxes”: Priyank Kharge on GST reforms

Bengaluru: Congress leader Priyank Kharge on Thursday criticised the Centre’s recent Goods and Services Tax (GST) reforms, stating that the “One Nation, One Tax” promise had effectively turned into “One Nation, 9 Taxes.” The Congress leader also highlighted the party’s long-standing demand for a simpler and rationalised GST system to ease the burden on farmers, small businesses, and the middle class.

Priyank Kharge’s criticism of GST reforms

In a post on X (formerly Twitter), Priyank Kharge wrote, “A bit of common sense seems to have dawned upon the Modi Sarkar on the Gabbar Singh Tax. For almost a decade, the Indian National Congress has been demanding simplification of GST. ‘One Nation, One Tax’ had become ‘One Nation, 9 Taxes’ — 0%, 5%, 12%, 18%, 28%, and special rates of 0.25%, 1.5%, 3% and 6%.”

Kharge added that the Congress had consistently advocated for an 18% cap or lower on GST rates, noting that the party had also demanded GST 2.0 in its 2019 and 2024 manifestos with a simpler and rational tax regime. He emphasised that the complicated compliance system had severely impacted micro, small, and medium enterprises (MSMEs) and small businesses.

“For the first time, farmers were taxed under the BJP, with GST rates on at least 36 goods/items in the farm sector ranging from 12% to 28%. Essential commodities like packaged milk, wheat flour, curd, books, stationery, etc., were brought under the GST,” Kharge wrote.

GST burden on the middle class

Kharge criticised the distribution of the GST burden, stating that the poor and middle class bear most of it while billionaires contribute very little. “Two-thirds of the total GST, i.e., 64%, comes from the pockets of the poor and middle class, but only 3% GST is collected from billionaires, while the Corporate Tax rate has been reduced from 30% to 22%. Now that the Government has finally adhered to our demands of rationalising and simplifying the GST, they are yet to figure out how they will compensate the losses to states like Karnataka,” he added.

Centre’s GST rationalisation and rate cuts

The remarks came a day after Finance Minister Nirmala Sitharaman announced sweeping reductions in GST rates on a wide range of essential items, automobiles, agricultural inputs, and electronic appliances. During the 56th GST Council meeting, it was decided to rationalise GST rates into two slabs — 5% and 18% — by merging the earlier 12% and 28% brackets.

Under the revised structure, daily-use essential items such as hair oil, shampoo, toothpaste, toilet soaps, toothbrushes, and shaving cream, previously attracting 18% GST, now fall under the 5% slab. Individual health and life insurance policies are now exempt from GST entirely.

Farmers and the agriculture sector will also benefit from these changes. Tractor tyres and parts, earlier taxed at 18%, will now attract only 5% GST, while tractors themselves will see a rate reduction from 12% to 5%.

Implications for small businesses and states

Experts say the simplification and rationalisation of GST will ease compliance burdens for MSMEs and small businesses, potentially boosting trade and consumption. However, concerns remain about how states will be compensated for revenue losses arising from the rate cuts.

Kharge’s criticism highlights the long-standing debate on GST fairness and its impact on different sections of society. While the reforms may reduce costs for consumers and farmers, states will require structured compensation to maintain fiscal stability.