Tag: Manpreet Badal

  • Punjab FM writes to Sitharaman, says agenda for GST Council meeting mundane

    By PTI
    NEW DELHI: Ahead of the GST Council meeting, Congress leader and Punjab Finance Minister Manpreet Badal has written to Finance Minister Nirmala Sitharaman raising several concerns and seeking timely and comprehensive action on the GST.

    In his five-page letter to the finance minister, he said even though the GST Council is meeting after eight months, the agenda for it is “mundane”‘ and does not deal with substantive issues that have been raised in the past.

    The Goods and Services Tax (GST) Council meeting is scheduled on May 28.

    Badal also said that bureaucratic decisions are setting dangerous precedents of subverting the process of law and stressed that the GST Council is a sum total of the Central and State legislatures for the purpose of GST and cannot be short circuited in important decisions.

    The Punjab finance minister also highlighted that life-saving items for COVID-19 have Basic Custom Duties of up to 20 per cent and GST of up to 18 per cent, and said they need to be tax free.

    “In view of the prevailing position the country finds itself in today, we need to take some urgent measures on the pandemic front.

    It is baffling that despite the crisis our country currently finds itself in, with millions of people suffering consequences of Covid and inadequate health infrastructure, taxes this high continue to apply on basic essentials needed to overcome this life-threatening disease,” Badal said.

    He also raised the issue of GST Implementation Committee bypassing and subverting state laws and said no meaningful prior consultation is held with states while the dispute resolution mechanism is totally missing in the GST.

    Badal also raised the issue of extending validity of certain exemption notifications, enactment of new restrictions on availment of tax credits by amending Rule 36 and insertion of rule 86B (payment of minimum tax in cash even while tax credit is available in certain cases) and cancellation and suspension of registration on additional grounds by amendment of Rules 21 and 21A.

    He also highlighted the issue of restrictions on validity of E-way Bill, amendment in various rules placing additional burden of compliance on tax-payers, extending compliance burden of e-invoicing on mid-sized entities with turnover between Rs 100-500 crore and waiver of penalties in certain situations.

    “Most of these decisions require an amendment to rules that would also require placing them before State legislatures. I fear that substantive benefits cannot be withdrawn or restrained by subordinate law and some of them may have ideally warranted a process of enactment of law,” he told the finance minister.

    “We are thus setting dangerous precedents of subverting the process of law making to officers, clearly a case of excessive delegation and running the risk with judiciary of being struck down. We should keep in mind that GST Council is sum total of the Central and State legislatures for the purpose of GST and thus cannot be short circuited in important decisions,” he noted.

    The Punjab finance minister, who is a member of the GST Council, said the GST is being increasingly perceived to be causing “excessive harassment and arbitrariness (eg freezing of productive assets of business, suspension of registrations, and denial of eligible tax credits) and moving away from a fair and non- adversarial tax system” that forms the foundation for a progressive tax.

    “It would have been desirable to hold a discussion within GSTC about striking the right balance between the needs of facilitation and enforcement before going for these changes. To guard against such abuse we should define and notify formally powers of the GIC,” he said.

    Congress leader Jairam Ramesh also said, “My colleague MS Badal has raised critical concerns in his letter to FM Nirmala Sitharaman. Will Madam FM listen to voices of reason?”.

    Badal also noted he has always hoped that GST will provide the foundation for a strong and vibrant India.

    He said while Punjab had even gone ahead with grave risks to its revenue agreeing to subsume Purchase Tax in GST, “our fears were not unfounded as have been proven with a somewhat dubious distinction of topping the States with highest shortfall. While we shall grapple with our deficit as best as we can, we don’t wish to see our sacrifices go waste for the nation. All hopes pinned on you.”

  • Manpreet Badal demands immediate convening of GST Council meeting

    By PTI
    NEW DELHI: Punjab Finance Minister and Congress leader Manpreet Badal has demanded immediate convening of a GST Council meeting for a serious mid-term correction on tax issues.

    In a letter to Finance Minister Nirmala Sitharaman, he said he is writing on the GST issue when the country is in the middle of battling the new wave of COVID which is more devastating in many ways than the one before.

    “With interest rates down by close to 200 basis points, shouldn’t we cut down interest rates under GST law (as also under other tax laws),” he asked in his letter.

    “I have been particularly persuaded to write this letter because there has been no meeting of the GST Council for the last six months even though council’s own rules drafted in terms of Article 279A of the Constitution provide for holding at least one meeting every quarter,” he said.

    Badal said the GST revenues constitute nearly 50 per cent of the tax revenues of states, while this percentage for the Centre is nearly half of that.

    States have a voting share of 75 per cent in the GST Council.

    “However, failure to hold any constructive consultation with states for so long in such critical times makes me wonder whether the Centre has usurped all the power of states putting the spirit of cooperative federalism, that formed the very foundation of achieving consensus on the epic reform, on the back burner,” it said.

    He also pointed that the Centre had not appointed a vice chair to the council from among the states.

    With taxpayers’ offices shut and staff working from home, how should the information needs of the department authorities during enquiries be met without physical contact, he asked.

    “How do we provide relief to sectors most impacted by COVID e.g. MSMES, aviation, hotels, restaurants, entertainment, commercial reality, retail? Do we need to make amendment in law to allow donations of goods for COVID without denying tax credits on inputs used in their manufacture or purchase?  Whether an amnesty scheme is needed to condone delays in payment of taxes during COVID period,” he asked.

    Badal said some issues that require urgent discussion in the context of COVID are whether GST should be exempted on hand sanitizers, face masks, gloves, PPE kits, temperature check equipment, oximeters, ventilators and the like.

    The Punjab finance minister said a number of provisions have been enacted in recent times through the route of subordinate legislation (rules) bypassing both the GST Council as well as the legislatures.

    “It is the basic principle of justice system that substantive rights of a person cannot be taken away except by a due process of law.

    The recent amendments in GST Rules (like restricting tax credits) have far reaching implications and have been made without even of an iota of discussion in the council,” he said.

    Badal also highlighted that harassment of taxpayers has taken an entirely new dimension with officers resorting to threats of arrest, provisional attachment of productive assets and freezing of bank accounts without any established norms.

    These provisions, that were enacted primarily for fly-by-night operators, are increasingly being misused against law-abiding businessmen with demonstrable capabilities built over decades and in situations where they may have indulged in no misdemeanor whatsoever at their end, he claimed.

    “How do we reduce litigation in our courts challenging the vires of the statutory provisions of GST laws? I’m informed it is difficult to repair a bad tax system if not done in the formative years,” the Congress leader asked.

    “The promise of assured compensation does provide a ready catalyst for such a mid-course correction for some more time,” he said, adding that the clock is sure ticking and India eagerly awaits the GST of which people all dream.