The GST we have given people is an emasculated one

What kind of GST is this that 40% of GDP in terms of value is outside the GST system?

Sir, there are moments in the history of a nation where opportunities come and we seize those opportunities to catapult the nation forward. That opportunity came to us. It came to us when we, in government, initiated this historic legislation. But, unfortunately, because of the consistent opposition of those who are now in the Treasury Benches, that opportunity slipped out of our hands.
 

I wish this moment had come earlier and we had given to this country a GST, which truly represents what we wanted to do. We have, on the other hand, cooperated with this government because we want a GST for the people of India. But, sir, I do believe that the kind of GST that we have given to the people of this country is not the kind of ideal GST that we wanted. This is an emasculated legislation. This is not a legislation which will achieve the objectives that we set out to achieve. This is not a GST where we were looking for one market and one rate.
 

That would have been a dream GST. Your government, of course, sir, has mastered the art of selling dreams, but has never earned the credit of realising them. That is the unfortunate story of the last two and a half years.

The first point I wish to make is, what we have got today is not a one-market, one-rate GST, but we have four market rates, a five per cent rate, a 12 per cent rate, an 18 per cent rate and a 25 per cent rate. But, even worse than that is the fact that both in the central GST and the state GST, the tax rate can up to a maximum of 20 per cent, which means, theoretically speaking, for any good or service, you can have a maximum rate of 40 per cent. And, on top of that, you can have a cess of a maximum of 15 per cent. So, we are talking about a 55 per cent tax rate in respect of a particular commodity or service. Sir, is this what you want for the people of this country? 

Sir, the third point that I wish to make is something very important, which perhaps has not been raised, and that is that this whole GST Network structure is under the control of a private entity. So, I want to know from the finance minister, who is absent at this point, as to how you are going to secure the data that is part of the GSTN structure. Data security is at the heart of doing business. What law have you put in place to ensure that there is going to be security of that data? What assurance have you given to the people of this country and to the business community, in particular, that the data which would travel on the GST system is going to be secure? And what if competitors get access to that data? Can you imagine the kind of havoc that access of that data by competitors can cause? How do you trust a private entity to ensure complete security of data?

Sir, the point I am making is, you are in government. You are responsible for the security of that data. The finance minister is responsible for the security of data. And, it just won’t satisfy us by him saying, “No, no; it is secure”. He must inform the House how it is secure, what is the legislation that is going to be put in place to ensure that it is secure and what proceedings will be initiated in the event that it is found that that data of mine has been stolen by somebody, by a competitor or otherwise?

The fourth point that I wish to make is that you have again jettisoned the Rajya Sabha. The issue of whether the tax rate can go up to 55 per cent is a matter that should have been discussed in this House. But by including it in the GST legislation and getting it passed in the Lok Sabha, we have had no opportunity to actually discuss it.

This GST excludes petroleum and petroleum products; it excludes electricity; it excludes tobacco and tobacco products; it excludes real estate; it excludes aviation turbine fuel. In terms of value, it excludes 40 per cent of GDP. What kind of GST is this that 40 per cent of GDP in terms of value is outside the GST system? 

In my interaction with industry I am informed that industry didn’t have a chance to have a complete consultation process with you. What you did was, you asked industry to send representations, which they sent you, but you didn’t have an open dialogue with industry, and industry has complained about it. 

In May, you are going to set out the rules in respect of the GST and rates in respect of particular commodities and services. That is going to happen sometimes between the 16th and 18th of May. Thereafter, you will finalise it at the end of May. Then the people of this country and industry and business will get to know, and they only have the month of June to get themselves ready for the GST that is going to be rolled out from the 1st of July. Is this how you treat your industry? Is this how you treat the business community? 

Sir, most of the business is done by the small and medium sector in this country. They are the backbone of this country in terms of commerce. And where do they have experience in digital, in organising themselves digitally? 

And the last point that I wish to make is this. While this GST is going to be implemented, taxes would have been paid under the old regime and industry is going through a transition provision to actually embrace this GST, what happens in the interim is going to be a very, very difficult situation to handle? How are you going to give credit to those who have already paid taxes under the present regime?

Edited excerpts from a speech on GST by Congress member of Parliament from Uttar Pradesh Kapil Sibal in the Rajya Sabha on April 6.