India is marking the 5th successful year of implementing a major economic reform, Goods and Services Tax (GST). It has been witnessing a perfect example of cooperative federalism courtesy of the GST council. So far, all the decisions of the GST council have been taken unanimously in the interest of the nation. Apart from this, GST has one other facet as well. It highlights the hypocrisy of the opposition which indulges in doublespeak.
In the GST council, behind closed doors, the opposition has been a leading proponent of many GST amendments and/or changing the tax slabs of various commodities. Unfortunately, for its petty party politics, it crops needless controversies on the decisions of the GST council. Ignoring or hiding the fact that in many changes/amendments or decisions opposition had been a vocal supporter or in some cases proponent of the decisions. Evidently, the opposition has done the same on tax slabs on food items. This has been rightly called out by the Union Finance Minister Nirmala Sitharaman.
It seems that the opposition has made it a habit of misleading the nation and cropping needless controversies. It did the same to fuel protests against CAA, NRC and Farm Laws. Sadly it is doing the same against the new Agnipath Recruitment Scheme or the unanimous decision of the GST council. The opposition is creating chaos in the name of decisions of changing tax slabs of food items. They are branding these decisions as anti-poor and what not. It is trying to project as if the government, unilaterally, has taken these decisions to burden the poor and the middle class.
Union Finance Minister Nirmala Sitharaman has timely disposed of these misconceptions planted by the opposition. She has made a series of tweets to shatter all the falsehoods claimed by the opposition. She pointed out the rationale behind the latest decisions taken in the 47th meeting of the GST council. She led out all the facts around the latest decisions on certain food items like pulses, cereals and flours.
Understanding the Chronology and how it is a joint decision of BJP and non BJP ruled states?
FM Nirmala Sitharaman categorically made it clear that it is not the first time that these food items have been brought under the tax regime. She highlighted that prior to the GST regime; states were collecting significant revenue from foodgrains. To validate her point she attached Value added tax (VAT) levied on rice by certain states. This was the reason that the introductory GST regime applied a 5% tax on BRANDED pulses, cereals and flour. Later, the GST council amended it to tax only those food items that were sold under registered brand or brands on which enforceable right was not foregone by the supplier.
Recently, the GST Council in its 47th meeting recommended to reconsider the approach for imposition of GST on specified food items like pulses, cereals, flour, etc. There have been a lot of misconceptions about this that have been spread. Here is a thread to lay the facts: (1/14)
Those amendments led to rampant misuse causing a significant drop in the GST collections from such food items. Reputed manufacturers and brands used this technical loophole to evade the tax slabs. The states too witnessed this shortfall and registered their issues with the evasive tactics of these brands.
To find ways to curb this tax leakage the government formed a Fitment committee. The petty tactics of the opposition are evident from the fact that the committee had officers of the opposition ruled states as well as their counterparts of BJP ruled states. This committee suggested changes to curb this misuse by the brands.
Not only that, the Group of Ministers (GoM), that proposed these incorporated changes, had members from West Bengal, Rajasthan, Kerala, UP, Goa and Bihar with Karnataka CM Basavaraj Bommai heading it.
Taking into consideration all these facts, the 47th GST council took this decision to change modalities. According to the new changes food items will attract GST when they are supplied in “pre-packaged and labelled” commodities.
The baseless accusation of burdening the poor and middle class doesn’t hold water as the Finance Minister made it loud and clear that essential food items will not attract any GST when sold loose or not as “pre-packed” or “pre-labelled”.
So to categorically summarise it all, all the decisions of the GST council have been unanimous. Plus the earlier modality of GST tax slab on these food items was sidetracked and misused by the reputed brands. This forced the GST council to deliberate changes which had a proper representation of the opposition ruled states as well. So to level this change in modality as anti-poor is cruel on part of the opposition.
With her elaborate tweet thread, the Finance Minister has thrown the misconceptions planted by the opposition into the dustbin. After this, the opposition should find some genuine issues to surround the government. It is high time for them to shun their double speak and act as a responsible opposition and to totally keep the purpose of GST alive which is to make India an economic giant through GST and other reforms through cooperative federalism rather than indulging in confrontational politics.
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