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GSTN security clearance key to Bill passage in House: Swamy

GSTN is the special purpose vehicle that will set up the information technology backbone for rolling out the indirect tax regime

Press Trust of India  |  New Delhi 

Subramanian Swamy
Subramanian Swamy (File Photo)

Terming the company formed to create IT backbone for rollout of GST as "anti-national", BJP MP on Tuesday said the Goods and Services Tax (GST) Bill can be passed by Parliament only if GSTN gets security clearance.

The Goods and Services Tax Network (GSTN) is the special purpose vehicle that was formed under the previous UPA regime to set up the information technology backbone for rolling out the indirect tax regime that will replace myriad local levies.

In a string of tweets and replies, Swamy also said that GST can be implemented only if the Supreme Court clears a petition on levy of entry tax.

"GST Bill can be passed by Sansad if two issues are addressed: MoH (Ministry of Home) security clearance of GSTN & reply to H. Adhia's 7 challenges. Date: 2020," Swamy tweeted.

But it was not immediately clear what he meant by 'Date: 2020'.

The government of India holds 24.5 per cent stake in GSTN while state governments, including NCT of Delhi and Puducherry, and the Empowered Committee of State Finance Ministers, together hold another 24.5 per cent. Balance 51 per cent equity is with non-government financial institutions.

Swamy has seen seeking full government controlled authority.

In the tweet today, he referred to seven challenges including fixing of the GST rate, deciding on exempt list and ensuring no dual control by the centre and states, listed out by Revenue Secretary Hasmukh Adhia for roll out of GST from April 1, 2017.

As one of his twitter followers asked when GST law will come into effect and if there is any possibility of its implementation from 2017 onwards, Swamy replied: "As of now it won't clear Supreme Court."

A nine-judge bench of the Supreme Court is hearing a slew of petitions challenging the legality of entry tax imposed by states as it hinders free trade. The Centre has argued that GST implementation would do away with the entry tax.

In further tweets, Swamy said, "Why this media anger over my raising GSTN's anti-national structure? RS Select Committee Report to Parliament on 22/7/15 said the same thing."

He said the "same anti-India forces" were batting for a second term for RBI Governor Raghuram Rajan.

"Media anger since same anti-India forces pushing for 2nd term for R3, are determined to get GSTN controlled by foreign commercial interests," he said.

Swamy had accused Rajan of keeping interest rates high and hurting the economic growth.

Earlier this month, Swamy had written to Prime Minister Narendra Modi raising strong objections to majority stake for private entities in GSTN formed during the UPA regime to manage and control the accounting and collection of GST.

He had urged the Prime Minister to ensure that it is replaced by a government-owned structure.

Referring to ownership details of the GSTN company, that will manage and control the accounting and tax collection of GST, he had said central and state governments will 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.

Alleging that GSTN has "appropriated" around Rs 4,000 crore in expenses and fees for its preliminary exercises, Swamy had asked why "private profit making entities have any stake, and that too majority stake" in a Section 25 company, which is a not-for-profit organisation.

Adhia in a presentation had listed fixing the GST rate, deciding on exempt items and ensuring no dual control by the Centre and states as challenge.

The other challenges include: calculation of revenue base of Centre and states and compensation requirements, structure of GST rates, list of exemptions, forming of consensus on Model GST Bill, threshold limits, compounding limits and cross empowerment to mitigate ill-effects of dual control.

First Published: Tue, August 23 2016. 12:48 IST