Bringing GSTN under PMLA ahead of polls will lead to tax terrorism, aimed at intimidating opponents: Cong

The Congress accused the Centre on Wednesday, July 12, of promoting "tax terrorism" by surreptitiously bringing the Goods and Services Tax Network (GSTN) within the purview of the anti-money laundering law, with an aim to intimidate the opponents of the ruling BJP and small businesses.

At a press conference here, Congress spokesperson Abhishek Singhvi said the government issued a notification to this effect on July 7, even when nine states opposed the move.

He alleged that the notification was issued in a tearing hurry as no bona fide reasons were cited by the government for the same.

"Bringing the GSTN under the PMLA (Prevention of Money Laundering Act) is a way of the (Narendra) Modi government to practise, promote and propagate tax terrorism," Singhvi said while pointing out that the step was taken with only months to go for the 2024 Lok Sabha polls.

"The triplet tactic of constraint, compulsion and coercion by the BJP through the new law shall wreak havoc on the business community in India. This is another tactic of the BJP to intimidate, incarcerate and imprison opposition leaders just ahead of the general elections," the Congress leader said.

He said the notification issued by the finance ministry amended a 2006 notification, facilitating sharing of information between the GSTN, Enforcement Directorate (ED) and other investigative agencies. The changes have been made for the provisions under section 66 of the PMLA, which provides for disclosure of information, Singhvi noted.

"The Modi government wants to hit two targets together. Firstly, to break the back of the market and secondly, to twist the organs of the opposition. The PMLA was implemented in GST subjects from July 7. The excuse given was that it was necessary for the country. It was implemented even after nine states opposed it," he said.

The Congress leader also questioned the timing of the move, while pointing out that less than a year is left for the parliamentary polls.

"With the election nearing, the government is finding new techniques and tools to target the opposition," he said while claiming that only 24 convictions have taken place in such cases over decades.

"How and why did this new notification come without any discussion? Is spreading the government's fear and phobia behind this move? Is this a new way to control small and middle-category businesses? Will its special message be only for the opposition? What was the sudden need to bring the GST under the PMLA?" Singhvi asked.

"What was the tearing hurry? Why could this not be discussed? Is harassment the only reason for bringing this law or whether this has been done to control small and medium businesses ahead of the 2024 Lok Sabha polls?" he asked while alleging that the government took the step without any bona fide reason and that it does not have the bona fide interest of the citizens at heart.

Singhvi also wondered whether this is a way of settling political scores or suppressing the grassroot-level donors of the opposition parties. "Has the law been introduced to further intimidate leaders from the opposition parties?" he asked.

Singhvi alleged that the government, which "misused" agencies such as the income-tax department, ED and CBI, has now launched another attack and through this law, it wants to harass small and medium entrepreneurs by way of tax terrorism.

The government used to adopt these tactics against opposition leaders but now, it wants to use the same against small businessmen and traders, he said.

Singhvi claimed that the move will imperil trade, which is yet to come out of the effect of the COVID-19 pandemic and has already fallen to a historic low.

"This move puts honest and innocent businessmen at the mercy of an organisation that has built a reputation for itself as a willing and pliant apparatus of the ruling regime," he said, adding that it could result in small businesses being investigated by the country's financial crime agency for GST violations, breaking the backbone of the economy.

Maintaining that the government has to ensure a smooth functioning of businesses in order to ensure a smart economic recovery, the Congress leader said at a time when the Centre is misusing the ED's powers, businesses are concerned about greater scrutiny at the hands of investigative agencies.

He claimed that the GST regime has already broken the back of the Indian economy and bringing it under the PMLA would prove to be lethal for the economy.

Bringing a large section of businessmen under the ED's lens and giving the agency the power to arrest is a way to practise and promote tax terrorism, Singhvi said while questioning the "surreptitious" manner in which the government took the step.

"The fact that the GSTN was brought under the PMLA (section 66) through a gazette notification of the finance ministry on July 7, without any discussion or debate in Parliament, raises legitimate apprehensions," he said, noting that the Centre was aware that such a move would face backlash from the public.