Key Points

He claimed the government has ignored revenue compensation, thereby leaving the reform incomplete.

The Congress leader called the announcement “GST 1.5” and asked whether the changes would truly help the economy.

He said that his party has for long been advocating for a GST 2.0 that reduces the number of rates, cuts the rates on a large number of items of mass consumption, minimises evasion, mis-classification, and disputes, does away with inverted duty structure (lower tax on output as compared to inputs), eases the compliance burden on MSMEs, and expands GST coverage.

Ramesh questioned the role of the GST council, asking whether it has been reduced to "formality" by citing Prime Minister Narendra Modi's earlier announcements during his August 15 speech.

“The Union Finance Minister has made major announcements last evening after the meeting of the GST Council, which is a constitutional body. However, even before the GST Council meeting, the Prime Minister had already proclaimed the substance of its decisions in his Independence Day speech of August 15th, 2025. Is the GST Council to be reduced to a formality?” the Congress MP wrote on his X handle.

He said the Finance Minister has finally recognised that GST 1.0 had reached a dead end, as it was faced with a lack of buoyancy in private consumption, subdued rates of private investment, and endless classification disputes.

“In fact, the very design of GST 1.0 was flawed, and this had been pointed out by the INC way back in July 2017 itself, when the PM had made one of his typical U-turns and decided to introduce GST. It was meant to be a Good and Simple Tax. It turned out to be a Growth Supressing Tax,” Ramesh wrote on his post.

The Congress general secretary in charge of communications said the announcements have made headlines since the PM had already laid down the pre-Diwali deadlines.

“Presumably, the benefits of rate cuts will be passed on to consumers. However, the wait for a true GST 2.0 continues. Whether this new GST 1.5, if it can be called that, stimulates private investment - especially in manufacturing - remains to be seen. Whether this will ease the burden on MSMEs, time alone will tell,” he said.

Ramesh, while attacking the government, took up the issue of compensation to the states. “Meanwhile, one key demand of the states made in the true spirit of cooperative federalism — namely, the extension of compensation for another five years to fully protect their revenues— remains unaddressed. In fact, that demand assumes even greater importance now.”

- IANS