Bharitya Janata Party’s senior MP Subramanian Swamy today said that for the Goods and Services Tax to become a reality, the government must first ensure that there are no unanswered questions regarding the Goods and Services Tax Network which will oversee its rollout.
A special purpose vehicle formed under the previous UPA government, the Goods and Services Tax Network is meant to create the information technology backbone for implementing the Goods and Services Tax. According to Mr Swamy the network is yet to get a security clearance.
In a string of tweets and replies, Mr Swamy also said that the Goods and Services Tax can be only implemented if the Supreme Court first clears a petition on levy of entry tax.
“GST Bill can be passed if two issues are addressed: MoH security clearance of GSTN and reply to H Adhia’s 7 challenges,” Mr Swamy said.
The government of India holds 24.5 per cent stake in GSTN while state governments and the Empowered Committee of State Finance Ministers, together hold another 24.5 percent. The remaining 51 per cent equity is with non-government financial institutions. Mr Swamy has been seeking 100 per cent ownership by the central government for security purposes.
On the question of whether the new tax regime can come into effect next year as promised by the government, Mr Swamy asserted that it was too early to say anything.
“As of now, it won’t clear Supreme Court,” Mr Swamy said. There apex court is currently hearing a slew of petitions challenging the legality of entry taxes imposed by states, which hinders free trade. The new tax regime may do away with all entry taxes.
Mr Swamy also said he wasn’t alone in raising questions about the Tax Network’s “anti-national structure” pointing out that a parliamentary select committee had raised similar concerns in 2015.
Earlier this month, Mr Swamy had written to Prime Minister Narendra Modi raising strong objections to majority stake for private entities in Tax Network formed during the UPA regime to manage and control the accounting and collection of the Goods and Services Tax. He had urged the Prime Minister to ensure that it is replaced by a government-owned structure.
Referring to ownership details of the company that will manage and control the accounting and tax collection under the Goods and Services Tax regime, Mr Swamy had said central and state governments jointly have only 49 per cent stake in it and rest with private entities like HDFC Bank, ICICI Bank and LIC Housing Finance Limited, that have foreign shareholding.