Government Defends GST Reforms Amid Opposition Backlash

Union Finance Minister Nirmala Sitharaman has strongly responded to opposition criticism regarding the government's latest GST reforms, which include raising the maximum tax slab from 28% to 40%. The increase, primarily targeting sin and luxury goods, prompted the Congress party to dub it the 'Gabbar Singh tax'.

FM Sitharaman at press conference after GST Council meet

Sitharaman's Direct Challenge to Congress

When questioned by journalists about the 'Gabbar Singh tax' remark and the new 40% tax slab, Sitharaman fired back: "Is the Congress Party demanding five per cent tax on tobacco and gutkha? Congress Party wants us to give it at 5%. Congress Party considered impossible to implement GST during their time."

Defending GST Implementation and Reforms

The Finance Minister praised the GST implementation, stating: "We have implemented and are also doing second-generation reforms under the leadership of Modi ji so that people get relief on their day-to-day items. MSMEs and labour-intensive units also get relief, due to which there will be easy compliance. Congress should decide whether it wants to oppose or support on the issues that are in the interest of the people. People will expose you."

Mixed Public Reactions to 40% GST Slab

Netizens expressed divided opinions about Sitharaman's announcement. One social media user commented: "Ironically this gutka and tobacco are highly consumed by common man. I am not supporting 5% slab but these can levied by state governments like on liquor," while another simply replied: "Well said!!"

Another X user added: "40% GST on tobacco, cigarette and beer. If you don't consume any of these, it's equivalent to 10% hike in your salary." Some users described it as a "massive tax hit," while others questioned why certain products aren't banned instead of being taxed heavily.

Rationale Behind Higher Tax Rates

The new 40% slab applies to items labeled 'sin goods' or luxury products including tobacco, pan masala, aerated drinks, and premium vehicles. This move represents a major restructuring of India's indirect tax system as the government transitions to a simplified regime with two main slabs of 5% and 18%, with the 40% rate serving as a special category.

Experts note that the higher rate ensures stable revenue since demand for these products remains largely unaffected by price changes. The reforms also merge the Compensation Cess with GST on these goods, maintaining overall tax incidence while easing compliance for MSMEs and labor-intensive sectors.