PM Modi says GST will help consumers, Rahul Gandhi slams it as ‘badly conceived’

NEW DELHI: The battle lines over GST became sharper with PM Narendra Modi on Thursday putting his full weight behind the tax reform, saying it would benefit consumers, the poor and the middle class even as Congress vice-president Rahul Gandhi kept up his attack on what he called a "badly conceived" measure.

At a conference on consumer protection, Modi listed out gains from the scrapping of checkposts at state borders, which he said reduced travel time for trucks from five to three days, translating into lower transportation costs. The PM said increased competition due to the goods and services tax would lead to moderation in prices, directly benefiting consumers. His remarks seemed intended to dispel the perception that the government had become a touch defensive in the light of protests by traders and opposition ahead of the Gujarat elections.

"In the coming days, this will be transferred to consumers. Today, some people may be benefitting from higher transport costs but in the days to come, the benefits will be transferred to the consumers, middle class, lower middle class and the poor," Modi said.

There was no let-up in Rahul's attack on the government over GST and demonetisation. Speaking a few hours later, Rahul, who recently mocked GST as "Gabbar Singh Tax", used the PHD Chamber of Commerce and Industry's platform to attack the government's economic policies, and accused the Modi administration of "killing" the economy through a "double tap" of demonetisation and a "badly conceived GST".

The PM's robust defence of GST by framing it as pro-poor and pro-middle class ran counter to the impression in certain quarters that protests from traders and attacks from the opposition ahead of elections in Gujarat and Himachal Pradesh had led to Modi pointing out that Congress too had a role in the tax rollout.

The estimate of Modi being on the defensive on GST was derived from his comment on October 19 at a rally in Ahmedabad that Congress and other political parties which were criticising the government over GST were party to the collective decision.

Later in the day, Rahul said, "The way this regime is working — or not working — has led to a 'double tap' killing of the Indian economy. Commandos in a hostage situation fire what is called a 'double tap' — two quick shots fired in the chest to ensure that their devil's target is down, is dead."

He attacked finance minister Arun Jaitley too. "While businesses are drowning, the minister has the nerve to go on TV every other day and say that 'things are just fine'," Rahul said. Start Up India could not be accompanied by Shut Up India, he added.

Rahul said people's trust in the Modi government was eroded. "Business thrives on trust. The trust in this government is dead. For some reason, the PM and his government are absolutely convinced that every single person in the country is a thief," he said.

The government has said the impact of structural changes such as GST and demonetisation will have a short-term impact but will be beneficial in the long term as the system will be more transparent and tax-compliant, helping generate more revenue. In his address earlier in the day, Modi said GST was meant to ease the rules for businesses as dozens of different indirect taxes had been scrapped. "Many hidden taxes have gone away. Now, the consumer knows how much tax he has paid to the state government and how much to the central government," the PM said.