Gowda lamented that while the government talks about inflation coming down, this Service Tax increase is "fundamentally inflationary" .
Congress on Monday dubbed as Modi government's "anniversary gift" to people the increase in service tax rates and insisted that the move was "fundamentally inflationary".
"Modi government completed one year in office last week but their anniversary gifts to the people of India kick off from today," party spokesman Rajeev Gowda said. "We all are going to be paying a much higher and unwarranted Service Tax of 14% and there are many more cesses that are on their way," he told reporters.
He lamented that while the government talks about inflation coming down, this Service Tax increase is "fundamentally inflationary" which affects every aspect of the economy, especially the service sector, which is more than 50% of the overall economy.
"It is also regressive. It hurts the poor and in that sense is hurting people at a very-very difficult time," he said. Eating out, mobile phone usage and air and rail travel have become expensive from today with the government hiking service tax rate to 14% from 12.36% including education cess.
Gowda also launched two e-books "One Year of the Modi Government: A Performance Assessment" and "One Year of the Modi Government: A Compilation of Critiques" which are sharply critical of the one year BJP-led NDA's rule.
Gowda latched on to an interview by Chief Economic Advisor Arvind Subramaniam to project the Prime Minister in poor light over his remarks on the issue of poverty targetting Congress. Besides, he said that Subramaniam has basically contradicted the government stand on the GST issue and has vindicated the Congress position that the changes and amendments in the GST Act need to be examined in much more detail by the Joint Committee that has been set up for this purpose.
Subramaniam has pointed out that the proposal for one percent inter-state tax could possibly make imported products more affordable than products that move from one state to another or across multiple states within India. Besides the Congress spokesman said that the poor people they are going to suffer because of the Finance Minister's "callous cuts" in centrally-sponsored scheme funding.
Also Read: Service tax hiked to 14%, mobile, hotel, other services to be costlier from today
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