Subramanian Swamy’s 550cr loot comment sent a shockwave nationwide

Subramanian Swamy at his logical best– Swamy stated loan by IDFC to GSTN as a 550cr loot.

Recently IDFC gave a loan of 550cr to the Goods and Services Tax Network on the guarantee of GOI. This action led to some serious reaction from BJP’s MP Subramanian Swamy’s twitter page. In a recent tweet by the BJP’s MP Subramanian Swamy, he wrote “Scandal- IDFC gives a loan of 550 crores today to GSTN. Guarantor: GOI, not majority shareholders! Why Looting India Robert Clive way”.

A few days back on the release of a book Swamy said, it is impossible to implement GST unless private companies are replaced by the state-owned firms in the GSTN- as it is the backbone for putting in place the new indirect tax regime.

“It (GSTN) will not pass the home ministry security clearance until the Rajya Sabha Select Committee’s unanimous recommendation is implemented and HDFC Bank, NSE, LIC Housing Finance, ICICI Bank are all removed and replaced by public sector banks because tax data is sensitive. It is confidential. We cannot allow foreigners the right to get this data.” Swamy said.

Overview of the Goods and Services Tax Network:

Goods and Services Tax Network is a powerful vehicle formed by the UPA regime to set up information and technology framework for rolling out indirect tax regime to replace the string of local levies. It (GSTN) is a section 25 non-profit and non-Government private limited company. The GSTN was set up on March 28, 2013, primarily to provide Information & Technology and services to the Central and State Governments, taxpayers and other stakeholders for the implementation of the Goods and Services Tax (GST). The Authorised capital of the company is 10,00,00,000 (INR ten crore only).

What is the structure of Goods and Services Tax Network?

The Government of India holds 24.5 percent stakes and all the states of the Indian Union, including NCT of Delhi and Puducherry, and the Empowered Committee of the State Finance Ministers (EC) together hold another 24.5 percent stakes in the GSTN network. But remaining 51 percent equity is held by the private financial institutions like- ICICI Bank, HDFC Bank, HDFC Ltd, ICICI Housing Finance and National Stock Exchange Strategic Investment Cooperation.

Why did Subramanian Swamy give 550cr loot statement?

Continuing to attack the firm set up by the UPA government to provide a support structure for GST rollout Swamy stated the IDFC’s loan a- 550cr loot. According to the loan agreement between IDFC and GSTN, GOI is the guarantor of the loan when it holds only 24.5 percent of the total stakes. Instead, the guarantors should be the non-Government banks like- ICICI Bank, HDFC Bank, HDFC Ltd, ICICI Housing Finance and National Stock Exchange Strategic Investment Cooperation which are part of the GSTN and hold 51 percent of the stakes.

Swamy’s 550cr loot statement got a mixed response and it surely sent a shock wave nationwide. The President of India Mr Pranab Mukharjee gave a green flag to the Constitution Amendment Bill on Goods and Services Tax. It is a major step towards the final launch of GST Bill on April 1, 2017.