Congress leader P Chidambaram tweeted 'thank Gujarat' yesterday after the Centre slashed GST rates on more than 200 items. Here lies a question, Why Gujarat? Because Chidambaram is implying that the government's move yesterday is intended to appease aggrieved traders in the poll-bound state.
Yesterday's tax cut by the government follows a smaller one last month, when the GST council lowered the tax rates on 27 products, many of them in segments significant to Gujarat's industry.
Chidamabaram is also viewing the tax rate cut, from 28 percent to 18 percent, as 'vindication' for the Congress, which has all along advocated a GST rate of 18 percent.
Congress vice president Rahul Gandhi has in fact been calling the government's blanket 28 percent GST rate 'Gabbar Singh Tax', after an iconic villain from Hindi cinema. And yesterday former finance minister Chidambaram said the government has 'learned its lesson' albeit late.
The government yesterday made the biggest change in the four-month-old GST regime, moving more than 80 per cent of the items in the top 28 percent tax bracket to lower rates. That will likely make cheaper a whole host of consumer goods, as well as eating out bills.
GST has become a significant poll issue in the Gujarat election campaign, with the Congress hammering away at the BJP-led NDA government at the Centre. Yesterday, Rahul tweeted, telling the Centre to 'acknowledge your incompetence, shed your arrogance and listen to the people of India.'
But the government said government cut GST rate yesterday because it is listening to the people. Home minister Rajnath Singh said it displays the 'government's sensitivity towards people'.