Lok Sabha

August 9, 2018

Saugata Roy speaks on The Goods and Services Tax (Amendment) Bill, 2018

Saugata Roy speaks on The Goods and Services Tax (Amendment) Bill, 2018


Sir, I rise to speak on the four GST related Bills brought by the present caretaker FM Mr Piyush Goyal. I am told that Mr Jaitley came to vote in Rajya Sabha today. So, when the change in portfolio will take place I do not know. But let me at the outset mention two things which have been mentioned with much sound and fury in the House. The Parliamentary Affairs Minister objected to certain comments made by Mallikarjun Kharge saying that the FM has never won an election. The FM responded to that. This book is more important than what we (interruptions)…It is called the Constitution.

Please listen to me. Read 105(1) with me, subject to the provisions of this Constitution and to the rules and standing orders regulating the procedure of Parliament, there shall be freedom of speech in Parliament. Please when you are sitting on the Chair, remember that there is absolute freedom of speech. You cannot stand up and say 352 such and such is not allowed. There have been great parliamentarians here. They have always spoken on all subjects. As long as you do not name anybody personally, as long as you do not make slanderous expressions, you can speak on any subject on earth without fear of rebuttal.

Whenever ruling party people put up points of order, why do you allow them? I am not in this. I just want to point out that the strange thing I am noticing in this House, in this present Lok Sabha, that ruling party members are using 352, 349 rules of the procedure to throttle the voice of the opposition whenever any inconvenient question is raised. See I did not learn the rules of procedure from Mr Nishikant Dubey or from Mr Anant Kumar. Sir, I have sufficient knowledge of the same and I respect the parliamentary procedure. This is a bad practice that whenever somebody is speaking from the opposition, you stand up and say ‘Sir, under this rule you can not mention Rafale.’ What is wrong with Rafale? If the Government is buying Rafale at an exorbitant rate, and that is paid from GST… it should not.

Secondly, I object to the Finance Minister speaking for 45 minutes. I object to it as this is not the convention of the House. The Minister who moves the Motion speaks for a short time. Then the Opposition members speak, and at the end he gives a detailed reply. I thought it out in my conscience that unless I set the record straight with regard to the Constitution and with regard to the fundamental freedom of speech the Constitution by Dr Ambedkar has given to us, I will be failing in my duty.

Now let me come to the four GST Bills that have brought in certain changes. Those (organisations) with an annual turnover of up to Rs 15 million will be allowed to opt for the Composition Scheme; now the threshold is Rs 10 million. The scheme provides for a flat and concessional GST rate but does not give Input Tax Credit. The Bills, the Minister claims, are primarily aimed at helping the MSME sectors and small traders. The Finance Minister had earlier said that simplified GST return forms, Sahaj and Sugam, would be introduced to bring about ease of doing business. The Minister had also said that the amendments will allow employers to claim Input Tax Credit on facilities such as full transport and insurances provided to employees. It provides for separate registration of companies having different business verticals, cancellation of registration and issuance of consolidated debit or credit notes covered in multiple invoices.

According to the amendments, e-commerce companies will not have to seek registration under GST if their annual turnover is less than Rs 2 million. The Bill to amend the Compensation Act will enable the Centre and the State to distribute the unutilised compensation fund among themselves. The Opposition has already said that this Bill will harm the small-scale sector.

Now what is happening is that the Government has opened up to the fact that elections are on the way. So suddenly, the GST Council, led by the Finance Minister, in a pre-poll sop, slashed GST on 100 mass-use items. On some items like sanitary napkins, milk, rakhis, etc. they have instituted zero tax; white goods like refrigerators, washing machines, etc., they have reduced GST to 18 per cent. So naturally big companies like Samsung, LG and other South Korean companies they will make a killing because they are dominating the market. Now these tax sops will lead to a loss of huge amount. Almost Rs 12000 crore of income will be gone. Now the minister has to explain from where the money will come.

Sir, GST has completed one year on July 1, 2018. I saw one article – it says ‘One year of GST is a saga of failure’. It also says contrary to the BJP claims, GST has only encouraged malpractices, corruption and black money. It is so complicated that small and medium sellers and shopkeepers shy away from it in every way. It is admitted by the ruling party that it is complicated. Its uniformity lies in the fact that shopkeepers have to charge 18 to 20% on sales and the process of arithmetic is involved, and it is so difficult that it is better to avoid it all together. As a result people are avoiding GST altogether. They are just keeping few products on the GST list so that they are following the tax regime and selling the rest as usual without paying GST. There is a new division between existence and non existence of GST has come into being, this leads to a practice where the government is deprived of genuine taxes to retailers and wholesalers charge more in the name of GST from the innocent buyers.  Sir, our Chief Minister had said at the time when GST was introduced that before your system is in order, do not introduce GST in a hurry. The GST network was not ready and our common small traders, they were not ready with the electronic wherewithal where they have to pay tax online, where all returns have to be put online. So they did not give the time to the country to prepare, just because Mr Modi wanted to announce it from the Central Hall at midnight on July 31, 2017, that’s why they introduced it.

Sir, BJP people; BJP’s original base was traders, small traders of Delhi, they formed the original BJP-RSS base. Now BJP is going for Hindutva base. So they are jettisoning small traders. Even the BJP members admit that small entrepreneurs who are exporters are facing the problem of refund. This is the amount they spend in advance which takes time to return as a result their money is stuck up and cannot invest further. GST has made the process far more difficult. For example the small scale commerce and industry in Tirupur in Tamil Nadu face serious difficulties on account of the technical and other problems of GST and are on the verge of closure constantly. Tirupur as you know, Sir, is close to Coimbatore and is the heart of the hosiery industry in the whole country, and GST has hit Tirupur very badly. Sir having said this, I had said that GST in principal everybody had said, ‘one nation, one tax’; very good. But we have now one nation, how many taxes? Five taxes – zero per cent, 12 per cent,18 per cent…

Now that I have come to the point, I will not while away the time of the House. I have certain queries to make to the Finance Minister who obviously has gone round the corner. <interruptions>  If the Finance Minister is not from the Lok Sabha we have to… because the function of the Lok Sabha is Budget and Bills. Main manta hoon ki Finance Minister Lok Sabha se hona chahiye because Lok Sabha has exclusive power. Sir, yeh throttling of Democracy kyun ho raha hai? Sir, you represent the ‘Dravidian’ culture Sir. Please hold up the Democracy.

Sir, there are many anomalies with regard to GST. The ‘Haj’ subsidy for Muslims is five per cent for private operators and 18 per cent for the ‘Haj’ Committees of the states. Football coaching attracts GST of 18 per cent.

Sir, they say there is an anti-profiteering authority. How does the Government monitor the anti-profiteering authority? Sir, still there are different rates in different states, for instance solar equipment in Karnataka is 5 per cent and in Maharashtra, it is 18 per cent. And the Authority of Advance Ruling, they have given this authority that there are two different rates.

Sir, most important, e-commerce today has become big business. You can sit at home and dial the app of Flipkart, anything from a pin to an elephant will be delivered to your doorstep. Now, who is monitoring the GST on e-commerce? This business is $27 billion. So even if you got 10 per cent on it, you should have got $2.7 billion. How much is the Government getting from it? I ask this specific question to the Finance Minister how much your…? Now one after another- Flipkart, now  Amazon – Jeff Bezos you must have heard the name – he is the world’s richest man now and he wants to enter the Indian market because… so Sir, this is important.

Lastly I must tell you, that IMF have said, and Mint has carried the report today, that if you do not improve the slab rate, your rating will come down. The BJP members without knowing will say ‘Moody’s, Moody’s hume accha bola’. If you do not improve GST, this Moody’s rating will come down. Standard and Poor and other rating agencies will rate you downwards.

Lastly, Sir, do you know that our Finance Secretary did a cut and paste job with GST, it was copied from Malaysia. Now after the new Government came in Malaysia, they are scrapping GST. So people are going back from GST. Your party Sir, opposed the GST, if Puratchi Thalaivi Amma was there, then GST would not have taken place. Yes, she is the one who resisted GST till the last. So, GST- One Nation, One Tax is a good concept. But the way the Government is implementing it, the country is unprepared.

With these words Sir, I end my speech on GST.