Congress slams GST cuts, says firms hiked prices ahead of rate reduction

Congress slams GST cuts, says firms hiked prices ahead of rate reduction

The Congress on Sunday accused the government of failing to pass on the benefits of the recent Goods and Services Tax (GST) rate reduction to consumers, citing a media report that alleged large companies hiked prices ahead of the tax cut.

Congress general secretary (communications) Jairam Ramesh shared the report on X, which claimed that while the Centre reduced GST on food items from 12% to 5% from September 22, consumers saw little relief as firms raised prices of products by up to 10%.

“The government had promised a ‘bachat utsav’ (savings festival), but what we are witnessing is a ‘chapat utsav’,” Ramesh wrote. He alleged that the move was less about economic reform and more about “event-oriented promotion” by the Prime Minister.

Ramesh questioned the efficacy of the reform, asking, “If the benefits of GST rate cuts are not directly reaching the general public, then what is the point?”

Last week, Prime Minister Narendra Modi described the GST overhaul as a “big and important step” towards Aatmanirbhar Bharat, asserting that lower prices would boost consumption and spur India’s growth story. Modi had said the reform would mark the beginning of a nationwide “savings festival.”

The government slashed GST rates across 375 items, including essentials such as toothpaste, shampoo, packaged food items, and big-ticket purchases like cars and televisions. The tax structure was simplified from four slabs—5%, 12%, 18% and 28%—to two, with 99% of daily-use items falling under 5% and 18%.

However, the Congress argued that pre-emptive price hikes by companies had neutralised the intended relief, denying consumers the benefits of lower tax rates.