1: Prime Minister Modi said the Council has “collectively agreed” on GST rate rationalisation and reforms to ease the burden on citizens.
2: Former finance minister P. Chidambaram supported the Centre’s GST rationalisation but asked why it took eight years to correct the structure.
3: The TMC criticised the BJP-led NDA government for being “tone-deaf” and acting only “when cornered.”
Prime Minister Narendra Modi on Wednesday announced that the GST Council has approved sweeping changes to the indirect tax regime, calling it a “next-generation” step designed to ease the burden on citizens and drive economic growth.
“The Union Government had prepared a detailed proposal for broad-based GST rate rationalisation and process reforms, aimed at ease of living for the common man and strengthening the economy,” Modi said in a post on X. He added that the Council, comprising the Centre and the states, has “collectively agreed” to the reforms, which he said will directly benefit farmers, MSMEs, women, youth, and the middle class.
The Council finalised a new two-tier GST rate of 5 per cent and 18 per cent, effective from September 22. Finance Minister Nirmala Sitharaman explained that televisions will now attract 18 per cent tax, life-saving cancer medicines are exempted, and the inverted duty structure has been corrected. At the same time, cigarettes and paan masala will face the steepest 40 per cent rate, with the compensation cess on tobacco products extended until GST compensation loans are repaid.
The decision was reached after a marathon 10.5-hour meeting — the 56th session of the GST Council — where the Centre and states resolved key differences to push through the new structure.
External Affairs Minister S. Jaishankar too welcomed the GST rationalisation, saying that the Council fulfilled PM's Independence Day announcement.
"The Next Gen GST today will have huge impact on the transformation story underway in India and the Government’s effort to improve ease of living & doing business," he said, also congratulating Sitharaman and Modi.
In a post on X late Wednesday, former finance minister and Rajya Sabha MP P. Chidambaram welcomed the Centre’s GST rationalisation and rate cuts but questioned the eight-year delay in revising the indirect tax regime.
Chidambaram argued that the present GST design and rates should not have been rolled out in the first place, stressing that the opposition had repeatedly cautioned the government about these problems for years.
"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," he posted on X. Furthermore, he questioned the timing of the changes bought.
He added, "It will be interesting to speculate on what drove the government to make the changes:
Sluggish growth?
Rising household debt?
Falling household savings?
Elections in Bihar?
Mr Trump and his tariffs?
All of the above?"
The All India Trinamool Congress (TMC) on Wednesday also welcomed the revised GST rates and tax cuts, describing them as a “victory for common people” that came after sustained pressure on the government.
At the same time, the Mamata Banerjee-led party hit out at the Bharatiya Janata Party-led National Democratic Alliance government, accusing it of being “tone-deaf” to public concerns and acting “only when cornered.”
"A victory for common people. A victory wrested from a tone-deaf regime that only listens when forced. From day one, Smt. Mamata Banerjee warned the Finance Minister that taxing insurance premiums was cruel, anti-people, and would deter families from securing their future, leaving them vulnerable to financial ruin in times of crisis. The Narendra Modi Govt. has finally buckled under pressure."
It noted that the rollback is an indicator that the BJP only acts when cornered.
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