GST NEWS UPDATE
April 1 still the target for GST: FM
Union Finance minister Arun Jaitley said the government was committed to implementing the Goods and Service Tax (GST) from April 1 this year and stressed that all contentious issues over which the Centre and the states are on disagreement will be resolved in the next few weeks. “The deadline to implement GST is September but we are committed for its implementation from April,” Mr Jaitley said, addressing a seminar on the GST at Vibrant Gujarat Summit in Gandhinagar. “Most of the issues have been sorted out, some critical issues remain and these critical issues over the next few weeks we will try and solve out.”
“One Nation One Tax regime will lead to a seamless and hassle-free transfer of goods and services in country. Implementation of GST will improve and expand India’s economy,” the central minister added.
Mr Jaitley also dismissed fears of slowdown in economic activities due to demonetization of high value currency bills and continuing cash crunch saying GST and note ban will boost growth and their impact on the economy will be seen next year.
“Difficult decisions initially pass through difficult phases. Historic decisions have temporary pain attached to them,” he said, obliquely referring to sudden move to scrap currency notes in order to root out corruption, terror financing and menace of counterfeit currency in the economy.
The Finance Minister held that cashless economy is the future and the government will promote it because the excessive cash is its own vices. “Excessive paper currency has its own vices, leads to its own temptations. We have seen its impact in India,” he said
Does GST Network require security clearance, MHA asks R&AW, IB
The Union Home Ministry has sought a response from the Research and Analysis Wing (R&AW) and the Intelligence Bureau (IB) on whether Goods and Services Tax Network (GSTN), the special purpose vehicle set up to provide IT infrastructure and services to the central and state governments for implementation of the Goods and Services Tax (GST), needs a security clearance.
The move is likely to cause a delay in the rollout of the much-awaited GST as Home Ministry officials said GSTN has not obtained any clearance earlier. The government owns 49 per cent in it, with the central and state governments owning 24.5 per cent each, while 51 per cent is controlled by private companies, including HDFC, ICICI Bank among others. Some of these private entities are controlled by foreign institutional investors (FIIs), said officials.
An e-mail query sent to GSTN, non-government private limited company formed under Section 8 of the Companies Act, remained unanswered. As per the GSTN website, the authorized capital of the company is Rs 10 crore.
MHA officials also argued that since GSTN is controlled by Indian companies, they may not need a clearance from the Home Ministry. However, a scrutiny is required on the role of FIIs which control up to 75 per cent of some of the entities that are part of GSTN.
The enquiry was launched following BJP MP Subramanian Swamy’s letter to Prime Minister Narendra Modi, questioning the Rs 300-crore grant being given by the Finance Ministry to privately-held GSTN. He also argued that the Central Board of Excise and Customs can perform the same work at a much less expense. It may be recalled that the GSTN SPV was set up in 2012 by the Congress-led UPA government.
The provision required that no single institution would hold more than 10 per cent equity, with the possibility of one private institution holding a maximum of 21 per cent equity. As per GSTN, HDFC Home Loans, HDFC Bank, ICICI Bank, NSE Strategic Investment Co each own 10 per cent stake, while LIC Housing Finance Ltd controls 11 per cent. GSTN was also required to help Centre and state tax administration prior to implementation of GST, added officials.
Home Ministry grants security clearances in cases where foreign investments, individuals or companies are involved and has categorised certain ‘countries of concerns’ which include China and Pakistan. The process of giving clearance was simplified by MHA in 2015 where 15 parameters were laid down and inputs from security agencies are now sought and processed within 4-6 weeks.
[The Indian Express]