Congress MP Jairam Ramesh Questions GST Council, Calls Modi’s Pre-Announced Tax Reforms “Formality”

New Delhi: Congress MP Jairam Ramesh on Thursday raised concerns over the role of the GST Council, questioning whether it has been reduced to a mere formality after Prime Minister Narendra Modi outlined major GST reforms during his Independence Day speech on August 15, 2025.

Ramesh highlighted that the Union Finance Minister Nirmala Sitharaman had made announcements after the GST Council meeting, but the decisions were already declared by the Prime Minister in his 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. Is the GST Council to be reduced to a formality?” Ramesh tweeted on X.

The Congress leader reiterated that his party has long been advocating for GST 2.0 reforms to simplify the tax system, reduce rates on mass-consumption goods, curb evasion and misclassification, eliminate inverted duty structures, ease compliance for MSMEs, and broaden GST coverage.

“Faced with low private consumption, subdued investment, and endless classification disputes, the Finance Minister has finally acknowledged that GST 1.0 had reached a dead end. GST was intended to be a Good and Simple Tax, but it turned into a Growth-Suppressing Tax,” Ramesh added.

While welcoming the recent rate rationalisation that consolidates the 12% and 18% slabs into a dual rate structure of 5% and 18%, along with a 40% slab for sin goods, Ramesh noted that the full benefits of a true GST 2.0 are still awaited. He emphasised the importance of fully compensating states for the next five years to safeguard their revenues.

Finance Minister Sitharaman’s reforms have significantly reduced GST on several essential items. Household items like hair oil, soaps, shampoos, toothbrushes, toothpaste, bicycles, tableware, and kitchenware are now taxed at 5%. Certain food items including namkeen, bujjiya, sauces, pasta, instant noodles, chocolates, coffee, preserved meat, cornflakes, butter, and ghee have also been brought under the 5% slab. Ultra-high temperature milk, chena, paneer, and all Indian breads, including roti and paratha, are now exempt from GST.

Ramesh cautioned that while these changes will benefit consumers, the long-term focus must remain on comprehensive GST reforms that simplify compliance, support MSMEs, and encourage private investment, particularly in manufacturing.