The Congress on Wednesday described the government’s move of bringing the GST Network under the ambit of the Prevention of Money Laundering Act (PMLA) as an expansion of tax terrorism and another surreptitious move to control small businesses and target political opponents.
Congress spokesperson Abhishek Singhvi called it “a clear intimidation tactic” and argued that Prime Minister Narendra Modi’s “ease of doing business” slogan was a hollow one.
“We have the experience of ED (Enforcement Directorate) and now the control-freak sarkar (government) is trying to create fear among small and medium businesses. The (general) election is just a year away and they intend to target businessmen who are supposed to be part of the Opposition framework,” he said.
“Why was this done surreptitiously, without any consultation process? A Parliament session is starting — why was this done on July 7, without discussions with the trading community? Why was the move not discussed at the GST Council, where it was presented yesterday as a fait accompli?”
Nine states opposed the move at Tuesday’s GST Council meeting. These were Delhi, Punjab, Tamil Nadu, Bengal, Himachal Pradesh, Karnataka, Chhattisgarh, Rajasthan and Telangana.
The government had through a notification on July 7 brought the GSTN under the ambit of the PMLA, claiming it would facilitate the sharing of information between the GSTN, ED and other investigative agencies.
Many small traders fear a significant increase in compliance costs and deeper investigations by agencies. Overall, 15 agencies operate under the PMLA, , including the Competition Commission of India, National Investigation Agency, Serious Fraud Investigation Office, state police, Director-General of Foreign Trade, external affairs ministry, National Intelligence Grid and the Central Vigilance Commission. They share information among themselves and with the ED.
“Two perverse reasons were given by the government for making this change – tax evasion and terror funding. These were the reasons given at the time of the demonetisation (too),” Singhvi said.
“This will wreak havoc on the business community. These are new weapons of coercion in the hands of the government. Those who want to escape scrutiny will have to join the BJP.”
Congress media department head Pawan Khera said: “With the GST brought under the PMLA, the ED will be free to arrest any trader. The Congress has been strongly advocating the need to simplify the GST.
“We oppose this anti-trader policy of the Modi government as this endangers millions of traders who are at the receiving end of a complicated GST regime.”
Singhvi flagged the alleged misuse of the ED by the Modi government, saying that even the Supreme Court had felt compelled to wonder why only one person was considered fit to head the agency. He added that apart from the ED director, several other key officials were on extension.
Asked about Union home minister Amit Shah’s disparagement of those rejoicing at the Supreme Court order declaring the last two extensions granted to the ED director “illegal”, Singhvi said: “The petitioners were seeking the removal of the ED director and that was granted.”
He added: “Even on the question of law, the court said it would intervene if it was misused with malafide intent.”
On Shah warning the “cosy club of entitled dynasts”, Singhvi said: “Why are you issuing threats? You target all your opponents, whether guilty or not. You have installed a washing machine for those who join you.”
Khera too commented on Shah’s remark that the ED would continue doing its job whoever headed it.
“Why is the home minister commenting on an agency that technically reports to the finance ministry? Does it not show that barring two people, the rest of the cabinet is unemployed?” Khera said.
“If who the director of ED is does not matter to you, why was the current incumbent given two extensions (against an apex court order) and why was your government fighting for a third?”
