Prime Minister Narendra Modi on Thursday said that the new Goods and Services Tax structure has eased the tax system, and alleged that the Congress-led regime before 2014 levied high tax rates even on essential items.

At an interaction in New Delhi with educators who received the National Teachers Awards, Modi said that the new GST structure will boost consumption and growth, and will improve the ease of doing business.

On Wednesday, the GST Council revamped the system into a primarily two-rate structure of 5% and 18% tax slabs, replacing the current four-tiered one.

With this, daily-use goods such as soaps, shampoos, butter, ghee, utensils and stationery will get cheaper. Additionally, health and life insurance will attract no GST. Rates have also been reduced on vehicles and electronic appliances such as televisions and washing machines.

The new rates will take effect on September 22 for most items. The GST system took effect in July 2017, replacing several indirect taxes such as the Value Added Tax, the Central Excise Duty.

On Thursday, Modi said that the tax regime under the Congress government had upset the monthly budgets of households.

“Farm inputs, medicines, life insurance and many such items were taxed heavily,” he said. “In 2014, if something cost Rs 100, Rs 20 to Rs 25 of that would go into taxes.”

Modi claimed that during the tenure of the Congress-led United Progressive Alliance government, essential products such as toothpaste, soap and hair oil were taxed at 27%. “The situation was such that Congress people would take 21% tax on children’s toffees,” he remarked.

The prime minister said the new GST rates will particularly benefit the poor, middle class, women, students, farmers and youth.

Pass on benefits to consumers: Piyush Goyal tells businesses

Union Commerce and Industry Minister Piyush Goyal on Thursday urged businesses to pass on the benefits of the new Goods and Services Tax rate structure to consumers.

Addressing an event in New Delhi, the Union minister described the reduction in GST rates as a “savings and demand booster” for the Indian economy.

He added that changes in the tax slabs as well as in procedures would contribute to the ease of doing business.

Earlier in the day, Opposition leaders questioned the eight-year delay in revising the GST structure, asking why the reform was not introduced “when millions suffered”.

Goyal, however, dismissed the criticism, saying the Opposition was spreading negativity at a time when India was the “fastest growing economy in the world”, PTI reported.

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