Congress Claims GST Overhaul As ‘GST 1.5’, Says Wait For 'True GST 2.0' Continues

The Congress party on Thursday termed the Goods and Services Tax (GST) overhaul as “GST 1.5” and claimed that the wait for a "true GST 2.0" continues. The party said time alone will tell whether it would stimulate private investment as well as ease the burden on MSMEs.

Congress general secretary in-charge communications Jairam Ramesh made the remarks on X stating that the key demand of the states demanding the extension of compensation for another five years to fully protect their revenues remained unaddressed. 

The Indian National Congress has for long been advocating for a GST 2.0 that reduces the number of rates, cuts the rates on a large number of items of mass consumption, minimises evasion, mis-classification, and disputes, does away with inverted duty structure, lower tax on output as compared to inputs, eases the compliance burden on MSMEs, and expands GST coverage, Ramesh said on X.

He said that Union Minister Nirmala Sitharaman made the announcements last night, "however, even before the GST Council meeting, the Prime Minister had already proclaimed the substance of its decisions in his Independence Day speech of August 15th, 2025. Is the GST Council to be reduced to a formality?"

"Faced with a lack of buoyancy in private consumption, subdued rates of private investment, and endless classification disputes, the Union Finance Minister has finally recognised that GST 1.0 had reached a dead end. In fact, the very design of GST 1.0 was flawed and this had been pointed out by the INC way back in July 2017 itself, when the PM had made one of his typical U turns and decided to introduce GST," he said.

He further asserted that the Goods and Simple Tax has turned into Growth Suppressing Tax. “The wait for a true GST 2.0 continues. Whether this new GST 1.5, if it can be called that, stimulates private investment - especially in manufacturing - remains to be seen. Whether this will ease the burden on MSMEs, time alone will tell," Ramesh said.

The GST Council approved limiting slabs to 5 per cent and 18 per cent, effective from September 22, the first day of Navaratri.