BJP calls the new GST regime ‘historic’; Congress asks how State’s revenue loss would be made up

While the BJP State unit has welcomed the revamped GST two-slab system as a “Deepavali gift to people by the Narendra Modi-led government”, the ruling Congress leaders have expressed concern over the revenue shortfall that States like Karnataka would face.

Revenue Minister Krishna Byre Gowda, the State’s representative in the GST Council, has estimated that the new GST regime would cause Karnataka an additional loss of ₹15,000 crore per year, even as ₹70,000 crore is being lost annually. While Karnataka was not opposed to rationalisation, it should be compensated for the shortfall in revenue, he said.

On X, the Congress party said, “Karnataka loses ₹70,000 crore every single year because of the Modi government’s GST betrayal... Our schools, hospitals, farmers struggle and our youth are denied opportunities; all while Delhi hoards ₹1.8 lakh crore in cess collected from the States.”

Congress’s demand

Echoing similar sentiments on X, Priyank Kharge, IT/BT Minister, said, “Now that the government has finally adhered to our demands of rationalising and simplifying the GST, they are yet to figure out how they will compensate the losses to States like Karnataka.” He further said that while two-thirds of the total GST (64%) comes from the poor and middle classes, only 3% GST is collected from billionaires.

Housing, Minorities Welfare and Wakf Minister Zameer Ahmed Khan pointed out that a request had been made to the Central government to provide GST exemption for housing schemes meant for the poor. However, no action had been taken in this regard, he said.

BJP ridicules Congress

On the other hand, the BJP leaders, who called the new GST regime, which kicks in from September 22, “historic”, also used the occasion to ridicule the Congress government in the State by accusing it of “indulging in constant and sharp increase in taxes.”

Veteran BJP leader and former Chief Minister B.S. Yediyurappa took to social media to say the new system would particularly help the poor, middle class and farmers.

Former Deputy Chief Minister Dr. Ashwath Narayan alleged that there was a contrast in terms of the situation in Karnataka and the approach by the Congress government here .“While the Narendra Modi-led government has displayed its commitment to bettering the lives of people through a reduction in taxes, the Congress government in Karnataka is leaving no stone unturned in levying new taxes. In fact, the Congress government has collected more than ₹ 1.50 lakh crore in the form of tax since it came to power in the state in 2023,” he said.