The Big Story: Veil done

On Thursday, the Rajya Sabha’s passed four bills related to the Goods and Services Tax, which aims to fold all indirect taxes into one rate and turn India into a common market. The four pieces of legislation spell out how the tax will actually be administered. This brings India even closer to implementing a reform that has been a decade and a half in the making.

For the GST to become a reality, state assemblies still have to pass their own versions of the legislation, and there’s also the mostly perfunctory question of presidential assent. At its next meeting, the GST Council, the deliberative body with representatives of the Centre and all the states, also has to decide on the rate for major commodities. The government has said that the new tax regime will be rolled out from July 1.

This brings up an important question about the way GST will be administered, one raised by several members of Parliament over the last few days. The IT backbone of the GST has been built and will be run by a private limited company called GST Network, GSTN for short. Only 49% of ownership of this company lies with the government. The remaining 51% is held by private entities including ICICI bank, HDFC bank and the Life Insurance Corporation.

Because the government does not have majority control of GSTN, the company has refused to let the Comptroller and Auditor General examine the data it holds. It insists that it is simply a “pass-through” portal, simply coordinating data that comes in from the central excise board and the states. But the government auditor has pointed out that under the Companies Act, the equity break-up doesn’t matter as much as the fact that the government has “strategic control” of GSTN, which means it should be open to auditing.

This point was raised by the Bharatiya Janata Party’s own Subramanian Swamy, who said in the Rajya Sabha that the GSTN was a “shady organisation” that needs to be restructured if it is to be trusted. However, Finance Minister Arun Jaitley, in his reply to the debate, said that the government has no plans to change its approach to GSTN.

The Goods and Services Tax is the biggest legislative reform that Prime Minister Narendra Modi’s tenure has seen. To ensure that this bold experiment is understood in full, it is crucial for the government to be able to examine and audit every aspect of the new taxation approach. The fact that the backbone underpinning the tax’s administration is avoiding scrutiny from the state auditor should be a cause for serious concern – something the government, with its strategic control of GSTN, could easily rectify.

The Big Scroll

The goods and services tax moves closer to implementation, but will gaps be filled till then, asks Anupam Gupta. Abhishek Rastogi and Rashmi Deshpande lay out a complete guide to understanding India’s biggest tax reform – the goods and services tax. Don’t listen to the politicians. Here’s why the GST might actually end up harming India, argues Shoaib Daniyal.

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Political picks

The Shunglu Committee finds “gross abuse of power” by Arvind Kejriwal’s government in Delhi. Shiv Sena parliamentarian Ravindra Gaikwad finally expresses regret for assaulting Air India officer. Government to do away with weeding out “forwards” among Other Backward Castes. Making any changes to the OBC list and removing well-to-do castes is a political hot potato. The Mamata Banerjee administration in West Bengal has filed a case under the Arms Act against Bharatiya Janata Party state president Dilip Ghosh for taking part in a Ram Nabami procession with a sword. Two memorandums of understanding on defence cooperation, including the $500-million line of credit for purchase of defence equipment from India, are likely to be signed between India and Bangladesh when visiting Bangladesh Prime Minister Sheikh Hasina meets Prime Minister Narendra Modi on Saturday. United States President Trump claimed that the US had carried out a missile strike in Syria in response to the Syrian government’s chemical weapons attack this week that killed more than 80 civilians.

Punditry

In the Telegraph, Milinda Banerjee reviews Semanti Ghosh’s Different Nationalisms: Bengal, 1905-1947, which explores the many concepts of nationalism present in Bengal right up till Partition. The creation of “us” and “them” divisions is worrying. But, as the Alwar attack shows, what is more chilling is the ordinariness of violence, writes Peter Ronald DeSouza in the Indian Express. The poor do not count: The richest household’s assets are worth much more than that of all the others combined and the same conclusion holds if we take the distribution of rural assets, points out Manas Chakravarty in the Mint.

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