The GST Council’s sweeping decision to rationalise tax rates has drawn mixed reactions, with the government hailing it as a historic reform and the Opposition questioning the timing of the move. The Council, chaired by Finance Minister Nirmala Sitharaman, scrapped the four-slab structure in favour of just two rates — 5 per cent and 18 per cent — effective from September 22, coinciding with the first day of Navratri. The move has significantly reduced the tax burden on a wide range of goods, making cars, bikes, and several household essentials cheaper.
Former Finance Minister and senior Congress leader P Chidambaram welcomed the rationalisation and rate cuts but criticised the government for delaying the reform. In a post on X, he argued that the current GST structure and high rates “ought not to have been introduced in the first place,” noting that the Opposition had been warning against them since 2017. He described the changes as “welcome but eight years too late,” accusing the government of ignoring repeated pleas for course correction. Chidambaram further speculated on the reasons behind the sudden reform, suggesting that sluggish economic growth, rising household debt, falling savings, the upcoming Bihar elections, and US President Donald Trump’s tariff war could all have contributed to the decision.
The reforms, however, have been positioned by the government as part of its “next-generation” vision for GST. Everyday essentials like soap, shampoo, toothpaste, talcum powder, and hair oil will now attract just 5 per cent GST, down from 18 per cent. Other commonly used goods such as bicycles, feeding bottles, utensils, and bamboo furniture have also been shifted to the lower slab. For the automobile sector, the new structure will make small cars and entry-level bikes more affordable, providing relief to middle-class consumers.
Prime Minister Narendra Modi praised the reform, calling it a bold step that will benefit farmers, MSMEs, the middle class, women, and youth. In a post on X, he recalled his Independence Day speech where he had promised “next-generation reforms in GST” to ensure ease of living and strengthen the economy. He said the Union government had prepared a comprehensive proposal to rationalise rates and streamline processes, which has now been implemented with consensus in the Council.
The overhaul marks the most significant change to GST since its rollout in 2017, with the government emphasising its pro-people focus, while the Opposition views it as a politically timed move in the backdrop of economic and electoral pressures.
