Hon. Speaker Madam,
as far as the tax rates in GST are concerned, the Government has already come
out with them but high rates will be damaging for the industry as well as the
consumer. The Government must resist from bringing too many goods or services
under the 18 per cent slab. There are too many rates. One Nation, One Tax –
this is what everybody is made to understand. It is only a myth which is
exploited by your own provisions even at this stage. There are too many rates,
virtually seven, including exemption, lower rate, cesses, surcharges etc. This
itself will defeat the objective of the GST. That is why I cannot call this
Bill which you have brought today, a game-changer. I would not give it more credit
than a small baby step forward. It is not a140 great reform
which will be the game-changer in this country as it is intended by the
rhetoric which followed with160 the GST provisions.
Regarding the
cesses, we do not know the fate of various cesses, surcharges, and additional
Excise Duty but the cesses and surcharges are the real segments or real factors
to distort taxation structure. We need a clarification on that. Coming to the
current rate structure, a cess has been proposed on luxury and sin goods over and
above the higher GST rate of 28 per cent. In fact, we will have to settle this
once and for all. There should have been some strict prohibition to ensure that
no cess, surcharge, or additional Excise Duty would be imposed henceforward.
That should have been the real intent. That should have been the genuine and
legitimate intent. I think280 at least this would have to be
done. Taxation of self-supplies proposes all inter-state movement of goods and
services between two divisions of the same legal entity would be subject to
tax. It will lead to significant compliance difficulties insofar320
as these provisions are concerned. In fact, any movement of goods and services
from one State to another becomes subject to tax. The head office interacting
with its production plant or distribution centre in another State will now be
considered to be rendering services which need to be valued, recorded in the
books of account, and then tax remitted. The same would apply for marketing or
business development support provided by a group in one State to fellow team
members in another State. In fact, the refund itself is not automatic. It
should have been automatic. What is the mechanism?420 I can
explain to you that ultimately this will be a technological nightmare. Nothing
is done to reduce their tension. It is a technological nightmare! The officials
implementing it are the people who would be suffering this proposed Act.
Ultimately, all these activities will not contribute to any incremental revenue
to the Government as any tax payable would be fully480
creditable but the associated compliance procedures will increase the
compliance and transaction cost significantly. In fact, the provision for the
process of giving a deduction and ultimately the refund is here. There is no
head of provision even to make payment or give credit. That has not happened.
A major aspect
which the nation has to consider very seriously is this. The GST Council is
only an extension of the Executive. I do not call it even Executive. It is560
only a coordinating body. It cannot substitute for the Legislature which
remains paramount in our present Constitutional structure. In fact, the GST
Council is only a coordinating body, not even Executive. The Central
legislation will have no power to abrogate the power of a State. What happens
to the Constitutional provisions? Some of our colleagues have already filed an
amendment on this. This is a very serious matter. Just do not take shelter
under the Constitution Amendment which you have640 already
done. As per the Constitutional framework provided under Articles 107 and 117,
the Indian Constitution prescribes the legislative procedure and legislative
relationship between the Union Executive and the Union Legislature. This main
stream has been totally cut-off. This leads to the real problem of legislative
independence. As per the present wording it appears that only the GST Council
and700 the Central Government matter as a notification can be
issued merely on the recommendation of the Council by the Central Government.
This is a fundamental contradiction to the basic legal framework and legal
relationship between the Union Executive and the Union Legislature as envisaged
in the Indian Constitution. We cannot abrogate this power as it is the basic
and fundamental feature of the Constitution of India. What happens? Let us
remove all those basics and all those provisions. That chapter can be removed
from the Constitution of India. You do not read it any further. The Centre can
issue an800 order, a mandate, or a diktat. They have the
right to do that. Without any kind of discussion, they can put any kind of tax.
I am not
criticizing the judiciary. When it comes to the judicial independence, they
stand840 up and claim that we have to protect it. Is it not
the duty of the judiciary to protect the legislative independence? We can have
an example. When Mr. Donald Trump, the US
President, issued an executive order on travel ban, the next day itself the
federal court said that it is quashed. We are not vigilant either in the
judiciary or in the executive. I must tell you that they did it but we do not
take anything which is sensitive. They are not worried about you but as usual
about business. This is the attitude with which we all work. Ultimately, what
will happen? Many such provisions of the Constitution may be abrogated tomorrow
by this Government or960 any other Government. You have set
an example today and the subsequent Governments will follow this example. Many
of these980 powers of the Parliament, the Rajya Sabha and the
Lok Sabha, could be taken away or abrogated by means of some constitutional
amendment. Legislative independence is the fundamental right and you have dealt
with it here. Any ambiguity on this issue will lead to lot of hassles for the
tax payer who will not get any relief whatsoever as he will have to file
multiple forms and returns and also report to multiple authorities. It is all
added. The idea is not that. Taxation has to be simplified. I would like the
hon. Finance Minister to spell out how this basic provision of tax compliance and
tax reporting will be simplified from the point of view of the tax payer. Will
this Bill address the long pending grievances and concerns of the tax payers in
indirect taxes and free them1120 from dual and multiple
controls? With regard to compensation to States, how do you calculate the
slabs? What was the need to have a new definition of agriculture sector in the
GST Bill? It will bring the agriculturist into the tax net from the back door even
as most farm produce are exempted from GST. This is also a transgression of the
fundamental basic principle of Indian taxation. What are the provisions on
purchase tax on food grains in Punjab , Andhra Pradesh
and Bihar , where the proceeds are spent on building
infrastructure? What will happen to them? They will be deprived of it. Are you
aware that many things have been taken away?
Mass education and
awareness campaign is required to educate tax payers. The department should
function in a proactive method. Of course, you will say that they have1260
been doing it. Is it possible to do that within three months? With regard to GSTN ,
whether the departments have1280 been empowered or equipped?
Have the workshops been held for taxpayers? Has the department put in place the
tax assistance cells to help the tax payers? To what extent the undue powers of
tax authorities are being curbed to prevent abuse and misuse of power? Will GST
usher in genuine tax payer friendly regime? It is anti tax-payer regime. During
the transitory period some genuine bona fide concerns on the part of tax payers
or assesses may take place. During this period the harsh provision of recovery,
inspections, search and seizure be waived or a lenient approach applied so that
small, medium tax payers may smoothly transit to the new regime without
harassment. There are no safeguards. Provision will have1400
to be made in the transition period to get an estimate of offset not availed
because of ignorance. There may also be instances of excess payments made in
the previous year. From the point of view of State finances also,1440
negotiations should be done with regard to the revenue losses suffered by the
States during the specified period after commencement of the enactment.
You have made some
calculations for compensations but that is not adequate at all. As I already
told you, one nation one tax remained as a myth. The goods like alcohol,
petroleum products and tobacco have been significantly contributing chunk of
indirect taxes. Now with such exemptions, how can tax buoyancy come out? More
than 40 per cent tax measures have been taken out of GST and it may be still
more. What is that transformation are1540 you going to effect
leaving the 40 per cent tax areas outside? Of course, you may be taxing in
other ways. That is a different matter but there is no clarity as to how are
they going to redress the difficulties of taxpayers. Is it easy to get the
reimbursement? The reimbursement procedure itself is cumbersome. Turnover of
less than1600 Rs.1.5 crore will be dealt with by the State
administration under the present provision. The Centre will only deal with 10
per cent of them. It is not clear how the categorization should be done. Again
in the case of above Rs.15 crore, it is 50:50 between the Centre and the State.1652
