Eight opposition-governed states have expressed their backing for simplifying the number of slabs of the Goods and Services Tax and cutting rates on goods of mass consumption, Congress chief Jairam Ramesh said on Saturday.
Besides this, these states have also sought a provision to make sure the benefits of the rate reduction are passed on to consumers, he added.
Ramesh pointed out that the eight states where the opposition is in power have also asked to be compensated for all states for a five-year period with 2024-25 as the base year because their revenues will be impacted negatively by the rate cuts.
They have also asked that extra duties on 'sin' and luxury items, above the sought 40 percent, be transferred entirely to the states, he added.
"Eight opposition-ruled states, Karnataka, Himachal Pradesh, Jharkhand, Kerala, Punjab, Tamil Nadu, Telangana, and West Bengal, have endorsed the lowering of the number of GST rate slabs and lowering of the rates themselves for products of mass consumption," Ramesh tweeted on X. These states, he added, have also sought a mechanism to ensure that the advantages of the rate cuts pass on to consumers.
He again asserted that the states are looking for compensation over five years, with the base year being 2024-25, as their revenues are likely to be affected by the rate reductions.
The opposition-ruled states have also sought that excess levies on 'sin' and luxury items over the proposed 40 percent be wholly passed on to the states, Ramesh said, noting that the Centre collects as much as 17-18 percent of its revenue from numerous cesses not to be shared with the states.
Ramesh stressed that these are all genuine demands and have been backed by recent studies published by the Union Finance Ministry's National Institute of Public Finance & Policy (NIPFP).
As per him, the Congress has been pushing for a GST 2.0 that not only lowers rate slabs and slashes rates but also considerably streamlines procedures and compliance burdens, especially for MSMEs.
He also added that the Congress has always emphasized ensuring the protection of the interest of every state in full.
Read also| 'Would it have taken so long?”: Mohan Bhagwat on RSS Deciding Next President
