Business Standard

Lacunae in GST pushing hawala transactions: Bengal Minister


IANS Kolkata
In the wake of reports of deposits by Indians soaring in the Swiss banks last year, West Bengal Finance Minister Amit Mitra on Saturday claimed hawala transactions have seen a rise due to failure of GST's automatic digitised process.
According to the design of the indirect tax system, GSTR 1, which is a form to be filled and uplinked, represents sales value figures, while GSTR 2 forms, which represent purchase figures, are self-populated, he said.
Speaking on Facebook Live to mark one year of the Goods and Services Tax (GST) roll-out in the country, Mitra -- also a member of the GST Council -- said a short form GSTR 3B was introduced and that form was "not backed by invoices".
"As a result of (GSTR 3B) not being backed by invoices, not only are we going completely manual, hawala transactions have also increased massively, according to our studies ... because you are not putting invoices and there is no way to check it," Mitra said.
Referring to soaring Indian deposits in Swiss banks, he said: "Hawala transactions have increased due to the failure of the GST's automatic digitised process. Nobody wants to talk about it."
According to media reports, after falling for three years in succession, money parked by Indians in Swiss banks rose 50 per cent to Swiss francs 1.02 billion in 2017 over the previous year.
"Export refunds are not happening and therefore, exports are under stress. Some three lakh refund applications are waiting (to be processed)," said Mitra who served as the Chairman of Empowered Committee of State Finance Ministers.
He alleged about Rs 2 lakh crore lying in the Central government's coffer is still waiting to be disbursed.
"Why was Rs 2 crore held by the central government in its coffer? It should have been refunded to the people," he said.
Mitra said his party Trinamool Congress has, in-principle, accepted the GST but said several times that the implementation is poor.
"As a member of GST council, I appealed not to implement it from July 1 last year and I said we would be in a mess. In fact, we are in a mess," he said.
Mitra also described demonetisation as a failure. "Total cash in circulation was Rs 18 lakh crore when demonetisation took place and now, current cash in circulation is 18.7 lakh crore. But the central government talked about cash-less and less-cash (economy)."
Slamming the Narendra Modi government, he said under the present dispensation at the Centre, Rs 1.5 lakh crore of GDP was lost due to fall in the its growth and corruption increased by 67 per cent in 2016 over the previous year, as per a Central Vigilance Commission data.
He said entrepreneurship took a "backseat" as small entrepreneurs including start-ups accounted for 9 per cent borrowing to businesses earlier and the same has came down to five per cent.
According to him, gross non-performing assets in the banking soared to Rs 9.01 lakh crore in 2017-18 from Rs 2.09 lakh crore in 2013-14 and "48 per cent Jan-Dhan accounts remained in active".
Mitra said the state's nominal GDP increased manifold and expenditure on developmental projects rose despite a debt-burden of over Rs 2 lakh crore.
"In terms of debt services, in the current year, Rs 47,000 crore would be paid on account of interests and repayment of loans taken by the Left Front government in the state and the Centre did nothing to help West Bengal," he added.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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First Published: Jun 30 2018 | 7:04 PM IST

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