Swamy Writes to PM Modi Against GSTN, Bats For Govt-Owned Entity
Bharatiya Janata Party leader Subramanian Swamy has raised strong objections to a majority stake for private entities in GSTN.
Bharatiya Janata Party leader Subramanian Swamy has raised strong objections to a majority stake for private entities in the company formed during the UPA government’s tenure to manage and control the accounting and collection of the Goods and Services Tax (GST) and has urged the prime minister to ensure that it is replaced by a government-owned structure.
In a letter to Prime Minister Narendra Modi, Swamy asked said the Goods and Services Tax Network (GSTN) should be subjected to a “close second look” and “thorough scrutiny”, questioning how a private entity can be allowed access to “sensitive” information without security clearance.
Referring to ownership details of the GSTN, that will manage and control the accounting and tax collection of GST, he said Central and state governments will jointly have only 49 percent stake in it and rest will be with private entities like HDFC Bank, ICICI Bank and LIC Housing Finance Ltd. that have foreign shareholding. Alleging that GSTN has “appropriated” around Rs 4,000 crore in expenses and fees for its preliminary exercises, he 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.
The most significant player it is obvious, in this tax collection effort should be the one who generates data collection. In this case, that would be the central and state Governments. “Everything else such as adjusting the percentage of GST for various states are just a matter of programming, which could be done by the Government itself through its Department of Electronics. After all, Government has already codified Income Tax. Nothing can be more complicated than that!Excerpt from Subramanian Swamy’s letter to Prime Minister Modi
He said the home ministry has not even been consulted and neither has it approved GSTN operators’ security clearance to allow them access to tax data.
“In fact, that it was never placed before home ministry for security clearance is shocking,” he said.
Adequate security has to be established to ensure that this data does not fall in the wrong hands.Excerpt from Subramanian Swamy’s letter to Prime Minister Modi
Swamy said as of January 31, 2016, the Centre and state governments have only 49 percent of the shares of GSTN. Being a Section 25 company, GSTN is a not-for-profit organisation. “Then why should private profit making entities have any stake, and that too majority stake in it? What is in it for them?” he asked.
Swamy also claimed that a close look at the private partners reveals that entities such as HDFC Bank, ICICI Bank and LIC Housing Finance Ltd. have shareholding of several foreign investment companies.
He said in LIC Housing Finance Limited, of 59 percent private shares, Abu Dhabi Investment Authority, Bank of Muscat, Mawer International Equity Fund, lClCl Prudential are the major private shareholders.
“The 10 pc share of NSE company is ominous,” he said and questioned the credentials of the firm. He also said that tax administration is a matter that deals with sensitive private information and being such a large shareholder, this automatically means that HDFC and ICICI will be bankers of public money collected through taxes.
Thus a large amount of money will pass through these banks, he claimed.