Saugata Roy speaks on the Finance Bill

FULL TRANSCRIPT

Sir, I rise to speak on the Finance Bill on behalf of my party, the All India Trinamool Congress. Sir, this Finance Bill when it was presented on February 1, 2017 had 150 clauses and 7 schedules. But strangely enough the Finance Minister in his series of amendments – which we received today – added 33 new clauses and 2 schedules. This is unprecedented and we have already protested.

The ruling party has done this after the UP victory. They think that they can write-off or overrule all rules, conventions and procedures. Otherwise I do not understand why in Finance Bill – which is supposed to detail the taxation proposals of the government – they have brought in the abolition or uniformisation of the tribunals, which have no relation to taxation proposals directly.

I may read names of some of the tribunals: Copyright Board, Railway Rates Tribunal, National Highways Tribunal, Cyber Appellate Tribunal, Competition Appellate Tribunal. These have no relation with taxation proposals but still the Finance Minister has forcibly overridden  Article 110 of the Constitution and the traditions of the House.

Now as we know that the taxation proposals are mainly related to the different taxes that we have in this country like – Corporation Tax, Income Tax, Customs, Excise Duty and Service Tax. If we see the Budget of this year, 19% of the income of the government comes from Corporation Tax, 16% comes from Income Tax, 9% from Customs, 14% from Excise and 10% from Service Tax. So, the direct taxes are 35% and indirect taxes are 33%.

Now in a properly running economy, Direct Taxes should be much more than indirect taxes because indirect taxes are basically inflationary. We find that in this Budget both are roughly equal.

You also know Sir that there is the Laffer curves in Economics which says, the higher the taxation rate the lower the collection. There has been no significant effort to lower the taxation rate so that collections could be improved. The whole Budget has been formulated in the backdrop of two important steps: one is the reckless demonetisation ordered by the new government on November 8, 2016 and the other is the shadow of the GST.  

The GST is coming into effect from July 1, 2017; both excise duty and service tax will be subsumed within the GST. The government has formed this budget with the expectation that GST would give rise to better collection. For the funding of such expenditure, government has increased money for infrastructure etc. Now where will the money come from?

The funding of such expenditure seems to be left to the mercy of implementation of GST which is likely to bring in more taxes to the Centre and States as also transfer of resources from the tax evaders to the Government through demonetisation. However evidence from cross country studies, Sir, this is important, has pointed to the contractionary effects of GST in the short term, particularly in the year of imposition. Thus tax revenue will be reduced. It is likely that tax revenue will fall this year.

That’s why Mr Jaitley, Sir, has not been revolutionary. Even with UP election he was very careful to give things to the common people. He just gave a mild compensation on Income Tax but people’s expectation was that the exemption limit would be raised to Rs 5 lakh. He did not give that. There was also a talk of farm loan waiver which the government has not given.

Demonetisation was Mr Modi and Arun Jaitley’s big gamble. They expected a bonanza due to demonetisation. People would deposit money and not withdraw and the money would remain with the bank, which they would distribute. However, roughly Rs 15 lakh crore was demonetised but almost Rs 15 lakh crore was deposited. Mr Jaitley or any other Minister will never reply if asked how much of money was deposited because they do not know.

The second question is how much money is required to remonetise i.e printing of new notes. I have not yet got an answer till date from the government. my estimate is that it will be Rs 20,000 crore. For one decision of Mr Modi Rs 20,000 crore will be spent now. How much extra tax did they get through demonetisation, after scrutinising all accounts? Only Rs 6,500 crore. So demonetisation has been a total loss.

The government gambled and it was a risky gamble which crushed the small farmers, the artisans, the daily labourers. One day the government will have to the pay the price, may be not in political terms.

Tax revenues may not perk up in 2017-18 when crude prices may be higher and corporate profits growth weak. The Centre has committed to reimburse State Governments for revenue losses post-GST. It has also guaranteed growth annually. If the initial year of GST is poor in revenue accruals, then where will it get the money? If the first year does not throw up enough money – the Rs 21 lakh crore Budget Mr Jaitley has proposed – where will this money come from? I do not know.

Earlier it was thought that compensation to States would amount to Rs 50,000 crore per year. but after demonetisation, most States have seen a drop in tax revenue and compensation figures may swell to Rs 90,000 crore. The Finance Minister’s pockets are empty. Where will you pay the compensation to the States from is not quite clear from the figures.

The Budget hence was little more than an exercise in damage control. It had a long list of giveaways and Government programmes in the context of demonetisation hurting the economy, but little in the way of job-creating reforms. One million people are joining the job market in India every year. In 2015, only 1.35 lakh new jobs were created in this country. Every year we are creating an army of unemployed.

You look at Mr Jaitley’s speech. Where is the promise for giving employment to the people? You tax, you demonetise, you introduce GST, you talk big, you say infrastructure, but where are the jobs? That is the question. The Budget encourages companies to remain small because they are giving concessions to smaller companies but not to bigger companies. So they are saying, remain small. You need not bother.

The Budget needed to do something to revise investment since private investment showed no signs of recovery. Madam, I’ll end by saying two points. The Government is going for privatisation. Today the Finance Minister announced he is going to disinvest Bridge and Roofs (Kolkata), Bharat Pumps, Scooters India, Hindustan News Mills and eight more companies. They are destroying the basis of the public sector in India. I totally oppose these disinvestment proposals of the government.

Lastly, the Budget does not tell us how much black money has been recovered so far. The Finance Minister in his Budget speech said that India is a tax non-complaint society. He has not shown a way by which he will be able to mop up more resources from the rich and give more relief to the poor so that the economy improves.

With these words, I end my speech. Thank you, Madam.

 

Vivek Gupta speaks in Rajya Sabha on the Union Budget

FULL TRANSCRIPT

Sir, a lot have been said about the Budget by my esteemed colleagues before me. Sir, through you, I want to point out to the Hon. FM a very glaring fact. Sir, in the name of various cess and surcharge, Rs 1.7 lakh crore is collected every year. Sir, this surcharge and cess is not shared with the States.

Sir, through you I would like to know from the Hon. FM, why this discrimination is done and why the States are deprived from their share of the revenue? Why this practice, Sir, of increasing the cess and surcharge? Sir, why not simply increase the tax rates so that the all States – we are sitting in the Council of States – will also get the share of that revenue.

Sir, particularly my State, we have done a rough calculation, is deprived of at least more than Rs 10,000 crore only on this account. That too at a time when there is a a lot of talk about fiscal autonomy and giving greater fiscal power to the States. Sir, I would request you to ensure that I get an answer from the FM.

Sir, moving on,enough has been said about demonetisation; I just want to leave them with some questions. Yesterday Indian Express reported that there is a 10% drop in advance tax collections. All along we have been told that the economy is doing well, the tax collection is going well. Yesterday, March 15, 2017, was the last date of advance tax payments; so there is some effect of demonetisation.

Sir, whenever you use your debit card or credit card, the petrol pumps are charging 2.5% surcharge. The Government of India charges of 15% service tax on this also. And during demonetisation, till December 31, 2016, 0.75% – that is roughly about this service tax amount – was coming back to us. So every time I am swiping my debit card or credit card at the petrol pump, I have to pay 2.5% surcharge. Sir I don’t understand why the government is penalising us for using credit cards while talking of less cash economy.

Sir, this Budget also failed to correct the increasing invasion into the finances of the States. Sir, recently in Bengal two officers were appointed specially by this Central Government just to look over the operations of our treasury. Sir, the Bengal Government is the only recipient of these officers. No other State in India got these officers. Through you, I want to ask why this special treatment was given to Bengal? What has Bengal done to deserve this?

Sir regarding Aadhaar, the government makes an announcement one day and the next day they withdraw the announcement. Now I wonder if the Aadhaar will be made mandatory to even enter the Parliament; probably that is the only thing left.

Sir, on black money enough has been said. I want to point out only one point. Sir 74 percent of the FDA that comes into India comes from three tax havens. These are figures that the government knows. Our Hon. Finance Minister very easily quotes in the press that ‘so many’ people go out abroad every year yet ‘so many’ people pay taxes. But Sir, people don’t even need to go abroad; just send the money abroad and get it back. Everybody knows this. The Panama Papers have been leaked, but Sir, no action has been taken on them. Domestic demonetisation is there, I wonder if there is any plan to do some foreign demonetisation on these people.

Sir, before I end my speech I just want to you speak about tax terrorism that continues. I just want to point out a few things. Probably the government has overlooked these facts. Sir there are 23 crore PAN card holders and only 4 crore file their returns. Sir, what steps has the Government taken to attack these 23 crore people who are not filing their returns? We would like to know the detailed answer from the Minister.

Sir, the PAN card is used more as a photo identity card; my request to you would be to request the Hon. Finance Minister to even put the addresses also on the PAN card. Then it would become a complete photo ID card which has address and photo both. A lot of these people sir have taken PAN cards only because it is the only ID accepted by banks. Although there is a list given by RBI where 18 documents are supposed to be accepted but no bank, no financial institution, no government offices accept these. The first thing they say is give me your PAN card. So, even a poor person with an income of less than Rs 1 lakh per annum has to go for a PAN card. Therefore, the government is feeling that there are so many income taxpayers who are not filing their returns.

It has been pointed out that some 1.8 lakh crore cases are pending in tax disputes. But whenever we get our orders that dues are adjusted, no details of those dues are available on the website. When we go to the Income Tax Department, files are lost. There is total anarchy. Through you, I would request some special trial be done to help these taxpayers.

Thank you, Sir.

 

 

Kalyan Banerjee speaks on the Undisclosed Foreign Income and Assets (Imposition of Tax) Bill, 2015 | Full Transcript

Full Transcript

Sir, on behalf of my party, I support the Undisclosed Foreign Income and Assets (Imposition of Tax) Bill, 2015. Sir there is no doubt that this type of enactment was needed long back but I have some debatable questions where the merit of the Bill is concerned. The real question is whether this Bill really holds in-built provision for establishing the charges at all or not.

This Bill does not make any provision for bringing back the black money from the foreign country to India. If I correctly remember, on several occasions the honourable Finance Minister said that the government was going to bring a Bill in respect of the undisclosed foreign income and assets for the purpose of bringing back the black money into the country. My humble question to the Finance Minister and the MoS Finance here: Can you show us any single provision whereby and where under our government is empowered to bring back black money into the country itself?

Baaton ke jaadu mein kuch nahi hota hai, saheb. Kaam karna hoga. Baaton ka jadoo toh bahut ho gaya. Vishwas toh 125 crore aadmi aap ko kiya tha. Ek paisa wapas nahi aaya.

Where is the promise of the Prime Minister that the black money would be brought back within 100 days and 15 lakh rupees would be given to every citizen of the country? He has gone beyond his promise. Sorry to say Sir, with all due respect to the honourable Prime Minister, unke baton mein jaadoo hai, kaam mein kuch nahi hain.

The provisions of this Bill are quasi-judicial in character. If no one discloses, then charge has to be framed, then proceeding has to be initiated. This takes a quasi-judicial character and when a penalty is involved it is a quasi-criminal character. Therefore, the charge to be farmed has to be established.

How can we establish the charges? Under Section 8(1B), you are saying, “enforcing the attendance of any person, including any officer of banking company and examining him on oath.”

If that is so, a person who stacks away any black money and keeps it in a foreign bank, unless the official from the foreign bank comes up with the documents, and gives evidence, how will you prove the charges? This is what Section 8(1B) says.

If someone has taken the money out of the country and deposited it in the foreign bank, information would not do. Because of the agreement some information coming from the foreign country would not do. It has to be proved. Each and every transaction has to be proved. Do you think that in all cases foreign bank officials would come and leak the evidence in the country? It is impractical.

This Act is all right for the purpose of publicity, for the purpose of doing things. For the purpose of achieving the political objective it is good. But come to the substance of it. How will you prove the charges unless you have evidence? If it is not legal evidence it cannot be done. And in the case of legal evidence one has to bring an official to the witness stand to prove it because the right to exam the effective person is there. How will you do it? This is the point so far as Section 8 itself.

Earlier, 12 times the voluntary disclosure scheme was brought in the country. This is not a new concept, it is an old one. In fact the in-built provisions of the Acts are akin to some of the provisions of the Income Tax Act itself. Nothing new, it is an old wine in a new bottle with a new name. We want to know exactly how much money was brought back under those voluntary disclosure schemes.

Sir, black money is generated in the country itself. Thereafter it is stashed away. Under this Act, what preventive measures have been taken by you to stop the generation of the black money? To curb black money you have to stop it at the threshold where it is being generated. How? This Act does not speak about that.  Sir unless it is stopped, unless it is prohibited, no good result will come.

Come up with a mechanism (we’ll appreciate it) specified under the law for stopping all sorts of black money, whether it is domestic or whether it is foreign. It has to be stopped.

Nobody knows yet the estimate of black money stashed away. Sir, I have been informed (subject to correction) in 2010 the Standing Committee on finance appointed three agencies to ascertain the amount of black money stashed away from the country. Such a report has not been disclosed as yet.

Sir, this Act doesn’t really have any teeth. If anybody discloses it is all right we can recover the money and impose 30% taxes. However if one doesn’t disclose, you don’t have any teeth to catch him. You are purely relying upon evidences which are in the foreign countries and not on the basis of the evidence here.

Do you really think a person who has a huge amount of black money will keep it in a nationalised bank here and transfer it via internet? Do you think a person who is keeping Rs 50 crore of black money will keep it in a bank anywhere in India in his account and transfer it within a minute? There are examples. A transaction is made here following which 50% is paid here and 50% is being paid in a foreign country. How can you catch this under invoicing?

For your political commitment, you want to establish that you are doing so many things. In effect, you are not doing anything. We will give you full support. You bring in more stringent provisions and we will support you whole-heartedly to prevent the generation of black money in the country.

But sorry Sir, with great respect I say that this bill has no teeth. It is only for the purpose of achieving some political goal.

Thank You Sir.

Black Money Bill is toothless: Trinamool in Lok Sabha

Speaking on behalf of the party in Lok Sabha, Chief Whip of Trinamool Congress in the House, Kalyan Banerjee today said that the Undisclosed Foreign Income and Assets (Imposition of Tax) Bill, 2015 was toothless and would not not bring back black money to the country.

Kalyan Banerjee, who is also a senior advocate, said that the Bill only serves a political purpose and is toothless legally. “Do you think a person who has black money will keep it in a nationalised bank and then transfer it over the internet?” he asked.

He advised the government that the time for words was gone and it was now time to act. He reminded the Centre of their promises of bringing back black money within 150 days.

Kalyan Banerjee also pointed out that this quasi-judicial Bill has no provisions to prevent the generation of black money within the country. Calling the Bill “old wine in a new bottle” he said the provisions of the Bill were akin to the IT Act.

Urging the government to ” do something meaningful”, he promised of all support to prevent the stashing of black money in foreign banks.

 

Full transcript of Kalyan Banerjee’s speech