'Long Overdue But...': Opposition's '1 Nation, 9 Taxes' Jab Over GST Overhaul

The GST Council's rationalisation of tax slabs - reducing four brackets to two while granting several exemptions, including premiums on health and life insurance, and ordering a 'sin' tax on some luxury goods - has been received with scepticism by the Congress.

The opposition party said it had campaigned for just such a simplification over the past decade, and accused the ruling BJP of having made the GST framework complicated.

Congress chief Mallikarjun Kharge said the government had twisted the 'one nation, one tax' tagline - with which the GST system was launched in 2017 - into 'one nation, nine taxes'.

And senior leader P Chidambaram, a four-time Union Finance Minister, said on X 'the current design of GST and the rates prevailing until today ought not to have been introduced in the first place'.

Meanwhile, other opposition leaders and parties, including the Shiv Sena (UBT)'s Priyanka Chaturvedi and Tamil Nadu's ruling DMK, have welcomed, albeit cautiously, the rationalisation.

"A long overdue correction on GST slabs that had been demanded has now been done," Ms Chaturvedi said on X, "High time GST truly works for India and Indians!"

Long overdue correction on GST slabs which was being demanded has now been done!! High time GST truly works for India and Indians !

— Priyanka Chaturvedi🇮🇳 (@priyankac19) September 3, 2025

Tamil Nadu Finance Minister Thangam Thennarasu, however, expressed concern over a potential loss of revenue for states. Mr Thennarasu and other non-BJP state governments highlighted the drop in revenue as a result of taxes being lowered, or cut, in yesterday's meeting.

The Tamil minister offered two solutions - either continue the present system of cess provision via an amendment to the Constitution or increase tax on 'sin' goods, i.e., luxury goods.

'Crying Ourselves Hoarse'

Earlier today the Congress' P Chidambaram criticised the government for having delayed GST rationalisation. In a short, sharp X post he said, "GST rationalisation and the reduction in rates on a range of goods and services are welcome but (come) eight years too late..."

"We have been crying hoarse for the last eight years against the design and rates of GST, but our pleas fell on deaf years. It will be interesting to speculate on what drove the government to make the changes (now)... sluggish growth, rising household debt, falling household savings?"

The GST rationalisation and the reduction in rates on a range of goods and services are WELCOME but 8 years TOO LATE

The current design of GST and the rates prevailing until today ought not to have been introduced in the first place

We have been crying hoarse for the last 8…

— P. Chidambaram (@PChidambaram_IN) September 3, 2025

Mr Chidambaram also wondered if the election in Bihar later this year was a factor.

The Congress called the overhaul 'GST 1.5' and said time alone will tell if the revisions are enough to stimulate private investment and ease the burden on the people and MSMEs.

Party boss Mallikarjun Kharge said, "The Modi government changed 'one nation, one tax' to 'one nation, 9 taxes'," referring to 'special rates' of 0.25, 1.5, three, and six per cent.

"Congress demanded GST 2.0 with a simple and rational tax system in 2019 and 2024... we also the simplification of complex compliances, which affect MSMEs and small businesses."

Didi @MamataOfficial wrote to FM @nsitharaman on Aug 2, 2024 urging withdrawal of 18% GST on life & health insurance policies. FM has finally done it, albeit to offset pain from friend Doland's 50% tariffs. @AITCofficial continues to fight anti-people policies. pic.twitter.com/nFF28Ip5xF

— Mahua Moitra (@MahuaMoitra) September 4, 2025

The Trinamool Congress also weighed in, with Lok Sabha MP Mahua Moitra zeroing in on exemption to insurance premiums. Bengal Chief Minister Mamata Banerjee had red-flagged this issue in August last year, Ms Moitra said on X, looking to deny the BJP brownie points.

'Need Of The Hour': Centre

In response the government said it expects this to be offset by increased consumption.

And in response to the opposition's complaints, junior Union Finance Minister Pankaj Chowdhury told NDTV the overhaul of the GST brackets was long overdue. "It was the need of the hour," he said and referred to Prime Minister Narendra Modi's 'Diwali gift' promise.

"These reforms are aimed at ease of doing business and to provide relief to citizens. The education and health sectors, and farmers and middle class will benefit," he said, pointing to zero GST measures for insurance premiums. "The decision was well-thought out."

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"The opposition can say anything... but the move benefits the middle class," Mr Chaudhary insisted, explaining also there was no causal link between the GST overhaul and the imposition of 50 per cent tariffs by the United States, a move that is likely to affect $48 billion in exports.

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Allies, including Bihar's Janata Dal United and Andhra Pradesh's Telugu Desam Party, support from both of which is critical to keeping the BJP's government afloat, also hailed the move.

JDU national spokesperson Rajeev Ranjan called it a 'bumper gift' before the festive season, and Andhra Chief Minister Chandrababu Naidu called it a 'pro-poor and growth-oriented decision'.

GST Rationalisation

The council has eliminated the 12 per cent and 28 per cent brackets, leaving only the five and 18 per cent. Sources told NDTV this week the overhaul is based on sharp differences in revenue collected; nearly three-fourths of GST revenue comes from the five and 18 per cent brackets.

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Sources also said a rationalisation is taking place now because the government has eight years of data and wants to use that to make the system easier to understand and more efficient.