Gabbar Singh will be reformed and the Congress is quick to claim victory.

Prime Minister Narendra Modi, during his annual speech from the Red Fort on Friday during the Independence Day celebration, promised reforms in the Goods and Service Tax (GST), which Leader of Opposition in the Lok Sabha Rahul Gandhi has often dubbed as Gabbar Singh Tax.

“For the last 18 months the Indian National Congress has been demanding fundamental changes into the Goods and Services Tax 2.0,” wrote Congress MP Jairam Ramesh in a statement made public on Saturday. “Finally the Prime Minister has understood as long as these changes are not introduced and there is no substantial increase in consumption and spending the process of development will not accelerate.”

The prime minister promised to “bring in next-generation GST reforms, which will reduce the tax burden on the common man.”

It will “reduce taxes on daily essentials, benefitting MSMEs, local vendors and consumers, and simultaneously stimulate economic growth and create a more efficient, citizen-friendly economy,” he said.

Ramesh claimed it was necessary to bring down the tax rates imposed under the GST.

“The tax structure must be simplified in a way that the states do not lose out on revenue and reduce classification disputes as well, which has become all too common. The GST compensation cess is ending on March 31, 2026. The deadline must be extended to compensate the states for any drop in revenue once the GST rates are restructured,” Ramesh said, adding the micro, small and medium enterprises (MSMEs) which provide the bulk of jobs should be given adequate protection.

The indirect tax reforms, which started when the late V.P. Singh was the Union finance minister 39 years ago, were finally rolled out after Modi became prime minister in 2017. In the UPA days, Modi, then the chief minister of Gujarat, had fiercely opposed the GST.

“The government should immediately initiate an official discussion paper for a wider debate on this issue,” Ramesh wrote in his statement on Saturday. “GST should really be ‘good and simple’ rather than the growth suppressing tax that it has turned into now.”

Despite the claims of Modi and his ministers on the success of the GST, till his Independence Day speech, businessmen and international bodies have criticised the tax on several counts. The World Bank’s India Development Update of 2018 described the Indian GST as too complex, with the second-highest tax rate among 115 countries. Businessmen have complained about delays in tax refund and excessive documentation. In recent days, traders in Karnataka have launched an only-cash movement after digital transactions prompted GST demands.

Rahul Gandhi had first used the phrase “Gabbar Singh Tax” for GST at a public meeting in Gujarat’s Gandhinagar on October 23, 2017

“Their GST is not GST but Gabbar Singh Tax,” Rahul had said at the Congress’s Navsarjan Gujarat Janadesh rally at Gandhinagar. Since then he has repeated the term countless times.

Modi’s announcement for the GST reforms came the same day when Sholay, the iconic film featuring the iconic villain Gabbar Singh, completed 50 years of its release.

“Congress’ Genuine Simple Tax was turned into Gabbar Singh Tax by BJP. Six rates, 1000+ changes in 1,826 days. Ease? It’s a nightmare to do business, especially for MSMEs,” Rahul wrote on his X handle on July 1, 2022, the fifth anniversary of GST rollout. “Congress will revive business and jobs with GST 2.0- single, low rate, shred fairly with States.”

This year on July 1, Rahul had severely criticised the GST as a “brutal tool of economic injustice and corporate cronyism.

“It was designed to punish the poor, crush MSMEs, undermine states, and benefit a few billionaire friends of the Prime Minister,” Rahul had said. “A ‘Good and Simple Tax’ was promised, Instead, India got a compliance nightmare and a five-slab tax regime that has been amended over 900 times. Even caramel popcorn and cream buns are caught in its web of confusion.”

‘Another victory for Rahul Gandhi’

Rahul Gandhi’s supporters notched up the GST reforms as yet another win for the Congress leader. Rahul’s supporters have often spoken about his opposition to the GST, demonetisation, his insistence on a caste census (which the Modi government was forced to announce) as some of his achievements as an Opposition leader.

Rahul has been critical of the bureaucracy-dependency nature of the GST in its present form, which he claims favours the bigger corporates who have the manpower and resources to deal with heavy paperwork.

Last month he had claimed 18 lakh MSMEs had been forced to shut down since the GST was rolled out eight years ago.

Rahul and leaders of Opposition-ruled states such as Bengal have also complained that the Modi government has weaponised the GST to punish non-BJP-ruled states including Karnataka.