GST cut meaningless if firms hike prices, says Congress

New Delhi: The Congress on Sunday cited a media report which claimed that the prices of several products were hiked by big firms before the GST rate reduction and asked what is the point if the benefits of the cuts were not reaching the common people.

Congress general secretary in charge of communications, Jairam Ramesh, shared a media report on X which said that the Centre reduced the GST rate on food items from 12 per cent to 5 per cent from September 22, and consumers should have benefited directly from this, but the reality is quite the opposite.

The report claimed that as soon as major companies learned of the tax cut, they increased the prices of their products by up to 10 per cent, providing little relief to the general public.

In his post in Hindi on X, Ramesh said it was not “bachat utsav (savings festival)” but “chapat utsav (fleecing festival)” that had been ushered in.

Instead of GST reform, “event-oriented Prime Minister’s promotion” had been done, he claimed.

“If the benefits of GST rate cuts are not directly reaching the general public, then what is the point?” Ramesh said.

Last Sunday, Prime Minister Narendra Modi had asserted that the GST reforms will accelerate India’s growth story, emphasising that it is a big and important step for Aatmanirbhar Bharat and linking a boost to ‘swadeshi’ products to the country’s prosperity.

Addressing the nation, Modi said the reduced prices of items across the board will launch “bachat utsav” for people.

New lower GST rates kicked in from last Monday, resulting in a slashing of prices of as many as 375 items ranging from toothpaste and shampoo to cars and television sets, a move seen as an attempt to boost consumption to cushion an economy facing tariff headwinds.

Tax rates of 5, 12, 18, and 28 per cent have been clubbed into two rates of 5 per cent and 18 per cent, resulting in a reduced price of 99 per cent of daily use items.