'Casinos over common people': Congress slams govt for withdrawing GST exemption on wheat flour, dairy products

The Congress on Tuesday attacked the government for its decision to withdraw GST exemptions on items such as pre-packed wheat flour, curd and buttermilk, and asked why further deliberations were ordered for deciding the tax rate for casinos but not for things consumed by lower and middle income groups.

Party leader Rahul Gandhi hit out at the government over GST rates, and said a single, low tax rate would help reduce the burden on the poor and the middle class.

Highlighting that the GST rate on diamonds is at 1.5 per cent, while that on health insurance was 18 per cent and hospital rooms was five per cent, he again dubbed the GST as "Gabbar Singh Tax" and said it shows who the prime minister cares for.

At a press conference at the AICC headquarters in Delhi, Congress spokesperson Gourav Vallabh said the Narendra Modi government's decisions over the last eight years prove how a regime's "cluelessness and incapability" can single-handedly destroy a nation's economic potential.

"The GST, which was planned as a progressive tax structure, has been so badly mishandled that rationalising it will be a long and painful process," he said.

Several improvements are needed in the current GST structure but instead of focusing on fixing that, the BJP-led government seems hell-bent on making the lives of the common person "miserable", he alleged.

"Finance Minister Nirmala Sitharaman has cruelly abandoned low-and- middle-income groups in the name of tax rationalisation. In the 47th GST Council meeting last week, a series of rate revisions was announced, most of which will adversely affect low-and-middle-income groups," Vallabh said.

He said exemptions have been withdrawn for pre-packed and pre-labelled food grains, fish, paneer, lassi, honey, jaggery, wheat flour, buttermilk, unfrozen meat/fish (not frozen), and puffed rice (muri).

These will now be taxed at 5 per cent, at par with branded items, he noted.

Exemptions have also been withdrawn for hotel accommodation up to Rs 1,000 per day and these will now be taxed at 12 per cent, Vallabh said.

Tax rates have been increased from 12 per cent to 18 per cent on products such as printing, writing or drawing ink, knives with cutting blades, spoons, forks, paper knives, pencil sharpeners, and LED lamps, he said.

Vallabh pointed out that the Group of Ministers had finalised a uniform tax 28 per cent GST on casinos, horse racing, and lottery but this decision was asked to be reviewed, and the GoM has been given a 15-day period to review its decision.

The GST Council last Wednesday deferred its decision on levying a 28 per cent tax on casinos, online gaming, horse racing and lottery pending more consultations with stakeholders, Union Finance Minister Nirmala Sitharaman had said.

A group of ministers headed by Meghalaya Chief Minister Conrad Sangma has been asked to consider submissions of stakeholders again on the valuation mechanism and submit its report by July 15, she had told reporters here.

Attacking the government, Vallabh said these rate revisions are unwelcome at a time when inflation is putting pressure on the pockets of the common person.

"The CPI inflation in May 2022 stood at 7.04 per cent, and was as high as 7.79 per cent in April 2022. These are way higher than the maximum limit of 6 per cent set by the RBI. All the products for which GST rates have been revised upwards are items that are consumed daily by the lower and middle classes," he said.

Posing questions for the BJP-led government, Vallabh asked is the government willing to jeopardise the living standards of the low-and-middle-income group at a time of high inflation just to increase its revenues.

"What is the government hiding from the nation concerning the economic situation that it is so desperate to raise revenues at the expense of people's welfare," he asked.

"What is more important for the government -- casinos or the common person? Why were taxes raised across the board with no review of the decision to remove tax exemptions?" Vallabh said.

Pre-packed and labelled wheat flour, papad, paneer, curd and buttermilk will be taxed at 5 per cent after the GST Council decided to stop allowing exemptions on such items while raising rates on a host of others.

The GST Council, at a two-day meeting here, accepted recommendations for rate rationalisation made by different groups appointed by it, resulting in tax changes, Sitharaman had said. The tax rate changes will come into effect from July 18.