Commerce Minister Piyush Goyal reminds Jairam Ramesh of “indirect tax chaos” during Cong rule as duo lock horns on X over GST

Piyush Goyal, the Union Minister of Commerce and Industry, took to X to remind Congress leader Jairam Ramesh of the “indirect tax chaos” that the country was plagued with during the rule of the United Progressive Alliance (UPA)—which was led by Congress—until 2014.

Claiming that the principal opposition party of India needs a “memory jog”, Goyal highlighted that when Congress was in power, India’s indirect tax system was a chaotic web—every state had its own rates, levies, and procedures. “Businesses struggled with cascading taxes, endless paperwork, and high compliance costs. In short, doing business in India had become expensive and exhausting,” he wrote.

He lauded Prime Minister Narendra Modi, who understood the challenges as mentioned earlier and delivered what the “Congress only talked about”: a single national market with standard rates and procedures. Since the implementation of the GST in 2017, it has created a transparent system that has curbed evasion, expanded the tax base, largely formalised the economy, delivered record revenues, empowered states, and boosted investor and business confidence.

“Now, the next-gen GST Reforms mark another leap forward. These reforms are not just about reducing tax rates, but about creating a virtuous cycle of growth,” he writes. According to Goyal, lower prices will lead to higher demand and household savings, and reduced input costs will make MSMEs more competitive. “This is true cooperative federalism and citizen-centric reform, strengthening businesses and aligning India with its global growth ambitions.”

Earlier, Ramesh had alleged that in his address to the nation, the Prime Minister tried to claim sole ownership of the amendments made to the GST regime by the GST Council—a constitutional body—which triggered a political slugfest between the two leaders. He averred that Congress has long argued that the GST has been a ‘Growth-Suppressing Tax’.

“It is plagued with a high number of tax brackets, punitive tax rates for items of mass consumption, large-scale evasion and misclassification, costly compliance burdens, and an inverted duty structure (lower tax on output as compared to inputs). We have been demanding a GST 2.0 since July 2017. This was a key pledge made in our Nyay Patra for the 2024 Lok Sabha Elections. The current GST reforms are inadequate,” Ramesh wrote in a post on X.

According to Ramesh, the outstanding issues include widespread concerns of MSMEs—the major employment generators in the economy— that must be addressed meaningfully. Apart from major procedural changes, this involves further increasing the thresholds that apply to interstate supplies.

He also alleged that sectoral issues that have surfaced—for instance, in textiles, tourism, exporters, handicrafts and agricultural inputs—must be tackled. States should be incentivised to move towards the introduction of state-level GST to cover electricity, alcohol, petroleum, and real estate as well.

“The key demand of the states made in the true spirit of cooperative federalism—namely, the extension of compensation for another five years to protect their revenues fully—remains unaddressed. Whether this round of GST changes—delayed by eight years—will actually boost the private investment that is essential for higher GDP growth remains to be seen,” he wrote.

Ramesh also highlighted that the trade deficit with China has more than doubled in the last five years, reaching over $100 billion. “Indian business is crippled by fear and oligopolisation that is leading many to resettle abroad.”