‘Eight Years Too Late’: Chidambaram Takes A Swipe At GST Reforms

Former Union Finance Minister and senior Congress MP P Chidambaram on Thursday welcomed the GST reforms that slash the 12 and 28 per cent slabs, but said that the reduction has come eight years too late.

“I welcome the reduction. The other truth is that it has been done eight years too late. We have always advocated a single rate, with a small plus or minus. This is a huge progress over the six or seven rates they had. In the course of time, I believe, it will come down to a single rate,” Chidambaram told ANI.

Earlier, Chidambaram, while talking to reporters in Madurai, pointed out that the Congress party and several economists, including former Chief Economic Advisor Arvind Subramanian, had raised concerns about the tax structure when it was first implemented.

Chidambaram said, “I appreciate the government for realising its mistake after eight years. Eight years ago, when this law was implemented, it was wrong. At that time, we had advised that such a tax should not be imposed. The then Chief Economic Advisor, Arvind Subramanian, also advised that it was a mistake.”

While thanking the NDA government for realising their mistakes, Chidambaram slammed Prime Minister Narendra Modi and his ministers for overlooking Congress’s pleas about the shortcomings of GST, introduced in India on July 1, 2017, replacing previous indirect taxes under the 101st Constitutional Amendment Act, 2016. The initial, unified tax structure featured multiple slabs, including 0%, 5%, 12%, 18%, and 28%, to apply to different goods and services based on their essentiality and luxury status.

“But at that time, neither the Prime Minister nor the ministers listened. We spoke about this many times in Parliament. I have written several articles. Many leaders and economists argued that this was incorrect and should be corrected. At least now, I thank them for realising the mistake and correcting it,” the Congress leader stated.

Chidambaram noted that the middle class and poor people were “squeezed dry” by high tax rates, but welcomed the reforms, saying they would bring relief to these groups. He said, “For eight long years, it was the middle class and poor people who were squeezed dry. The 12% and 18% rates have now been reduced to 5%. For all these years, it was the very same people who bore the burden of paying 12% and 18%.” (ANI)