GST reforms will mostly help poor; Andhra government failed to demand compensation: CPI(M)

Amaravati: Andhra Pradesh CPI(M) secretary V Srinivas Rao on Thursday said that the GST reforms will mostly help the poor by reducing prices, but found fault with the TDP-led NDA government for 'refraining' from asking for compensation as it will lead to major income gap.

On Wednesday, the GST Council approved a complete overhaul of the goods and services tax regime, slashing tax on several common use items, from hair oil to corn flakes and personal health and life insurance policies and umpteen others.

"This is mostly (GST reforms) a good thing because it will help reduce prices and at least help ordinary people. But the thing is, there will be a lot of income gap faced by the state government. The Andhra Pradesh government supported this regime, but did not ask for compensation," Rao told PTI Videos.

He highlighted that the finance ministers of southern states--Tamil Nadu, Kerala, Karnataka and Telangana--had demanded compensation from the Centre, but not the N Chandrababu Naidu-led government in Andhra Pradesh, a key ally of the Union government.

Asking how Naidu would manage the revenue gap, Rao said it could only be filled through Central compensation or by levying more burden on people via indirect taxes. He warned that the CPI(M) would not allow additional taxes.

"We won't accept any extra burden put on the people to fill this income gap. So, our government must also join hands with our neighbours to demand the Central government for compensation and that money will help our state's developmental projects," he said.

Andhra Pradesh Congress Committee (APCC) vice president Kolanukonda Sivaji asserted that the Narendra Modi-led NDA government at the Centre had "no other option but to reform the GST regime as Congress leader Rahul Gandhi had campaigned against it relentlessly".

It is surprising that the Centre is calling the new rate structure a 'Diwali bonanza', he said, observing that Modi was "compelled to effect it under pressure from US President Donald Trump tariff pressure and Gandhi's agitations".

"The Congress demands that justice be done to the states that are losing revenue due to these reforms, and that they be compensated. The new GST tariffs offer no relief to MSMEs. Furthermore, heavy taxes on the agricultural sector continue," Sivaji told PTI.

Further, he said that the Congress demands that all cases filed under the name of alleged 'GST harassment' be cancelled.

The party also demands that petrol and diesel be brought under the ambit of GST and GST slab for cement and steel be reduced to five per cent, he said.

"This announcement is part of a political gimmick. This is nothing but a drama by the BJP government to gain advantage as it introduced the national budget before the Delhi state elections and to save itself from vote theft controversy before the Bihar assembly elections. The credit for this achievement goes to the INDI Alliance and Rahul Gandhi," he said.

Meanwhile, Andhra Pradesh BJP chief spokesperson V Jaya Prakash noted that the Centre has simplified GST to benefit the poor, farmers and middle-class people.

"Narendra Modi always moves forward by keeping poor people's welfare as a goal. With the fresh GST reductions, poor and middle-class families will directly benefit," he added.