GST reforms will ruin small businesses: Congress MP

As the new GST rates came into effect on Monday, Congress MP Imran Masood warned that the changes touted by the government as a boost to the economy, will instead ruin small businesses.

“When they (government) announced this (GST Reforms), they claimed with great fanfare that it would boost the country’s economy… However, by doing so, they have ruined small businessmen,” Masood was quoted as saying by news agency ANI.

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The Congress leader said that the entire country is suffering what he called were the “the repercussions of the reckless and poorly thought-out decisions”.

Referring to Prime Minister Narendra Modi’s address to the nation on Sunday, he said that he was hoping the PM will speak on the massive fee imposed by the US on the H-1B visa issue, which has caused the biggest damage to India.

The Congress leader’s criticism came as the next-generation GST reforms were implemented, aiming to lower taxes on food, hotels, cars, bikes and everyday essentials while streamlining slabs to 5 percent and 18 percent.

Several everyday essentials and big-ticket items are set to become more affordable.

Prime Minister Narendra Modi described the rollout of ‘GST 2.0’ as the beginning of a ‘GST Savings Festival’, and framed it as a step towards economic self-reliance and the promotion of indigenous manufacturing.

Under the new regime, a wide range of goods and services — from food products and daily-use household items to cars, bikes, televisions, insurance policies, and electronic appliances are also set to become cheaper.

Several food items — including chapati, parathas, milk, paneer, khakhra, and pizza bread, will now be exempt from tax. Under the 5 percent tax bracket, items such as butter, ghee, sausages, ice cream, coffee, juices, soya milk, dry fruits, cheese, meats, confectionery, jams, biscuits, and breakfast cereals will fall.

However, sin goods like tobacco and soft drinks will be taxed at 40 per cent.