Did Opposition Pressure Force Modi Govt To Tweak GST Rates?

With the announcement of a standard GST rate, Gandhi claimed that they have woken up BJP from a “deep slumber”.

Is the BJP attempting to change its course on GST under political pressure from Congress?

(Photo altered by The Quint)

Two days after Finance Minister Arun Jaitley said that the GST framework was moving towards a single standard rate, the opposition Congress responded to the proposed changes, saying, the credit for these changes goes to Congress, as the party president, Rahul Gandhi also claimed that they have woken up Prime Minister Narendra Modi from a "deep slumber".

On Wednesday, 26 December, Congress leader and former finance minister P Chidambaram in a series of tweets, asked the Modi-led central government why it has suddenly changed its stance.

"Since yesterday, the Congress party's original demand of an 18 percent cap is the declared goal of the government," Chidambaram said.

Speaking to BloombergQuint's Tamanna Inamdar, Spokesperson of BJP and Congress, Aarti Sathe and Gourav Vallabh along with founder of Lakshmikumaran and Sridharan, V Lakshmikumaran discussed during the "Primetime Debate", that whether the proposed changes announced by Finance Minister Jaitley and later reiterated by PM Modi were introduced due to the mounting pressure from the opposition Congress.

Initiating the debate, Lakshmikumaran stated that a single tax slab, especially for indirect taxes in India is "not workable." He further supported his claims by saying that due to a large disparity in the income levels in the country, a single-tax rate slab in India is not achievable.

“In the last 60 years, we have been taxing commodities depending on the consumption of those goods by various people. Indirect taxes fall equally on all. To say we will levy tax at the same rate for all the goods, it may not be the appropriate thing.”

Lakshmikumaran, founder Lakshmikumaran & Sridharan

Lakshmikumaran added that the government is pruning the list of "taxed commodities" however, it is not changing its course of introducing a single standard tax slab.

Speaking on Congress claiming credits for the proposed changes in the GST tax rates, BJP spokesperson Sathe said that the "Congress is "hogging credit for the work that BJP has done". Sathe also echoed Lakshmikumaran statement and added:

“Government is pruning the list... It is not a change in stance. It has been a deliberative process. A council has been set-up where stake holders are involved, there are policy and academy bodies which are giving inputs, therefore, it is a revolutionary step being taken. After these deliberation, there of course, will be some tinkering around.”

Aarti Sathe, Spokesperson of BJP

Responding to Sathe and Lakshmikumaran's claims, Congress spokesperson, Vallabh, said that the BJP is looking at a “revenue neutral slab” which Rahul Gandhi had previously mentioned during election rallies.

“Finance Minister is saying 28 percent is dying slab. He is then saying that there should be one rate between 12 and 18 percent. He is exploring an idea of 15 percent which is a revenue neutral rate. This is what Rahul Gandhi has said.”

Gourav Vallabh, Spokesperson of Congress

Vallabh further added that during the Gujarat elections, Gandhi had mentioned that there should not slabs beyond 18 percent as the GST should be made “Goods and Simple Tax.”

“The government is exactly doing what Gandhi had said,” Vallabh indicated.