New Delhi: Union Commerce Minister Piyush Goyal on Friday described the reform in the Goods and Services Tax (GST) as “one of a kind” since independence, hailing it as a “gift” to the country. He drew a clear contrast between the current GST framework and the Congress-led United Progressive Alliance (UPA) era, criticising the former government for failing to inspire confidence among states regarding compensation promises for the proposed unified indirect tax.
“When Prime Minister Narendra Modi announced the GST in 2017, he committed to all states a 14% growth in annual revenue. PM Modi had the confidence of all states, and that’s how the one indirect tax was announced,” Goyal told reporters in New Delhi.
He emphasised that the Modi-led government had fulfilled this commitment, even during the Covid-19 pandemic, by ensuring compensation to states at the assured 14% growth rate despite economic challenges.
Responding to criticism from the Opposition, Goyal rejected allegations of mismanagement. He argued that the GST had significantly eased the tax burden on citizens compared to the pre-2014 period, when indirect taxes often amounted to between 30% and 35%.
“That burden has been rationalised under GST,” he said, highlighting the shift to a more transparent and streamlined tax structure.
The minister also stated that leading industrialists had pledged to pass on the benefits of lower GST rates to consumers. “We have been assured by the industrialists that whatever profit is gained from lowering the GST rates will be passed on to the consumers,” he said, adding that this would encourage demand and drive investment.
“It has a promising multiplier effect,” he noted.
On Wednesday, the GST Council, India’s apex decision-making body on indirect taxation, approved a major overhaul of the system. The previous four-tier structure of 5%, 12%, 18%, and 28% has been replaced by a simplified two-rate model of 5% and 18%, along with a special 40% slab for select goods.