GST a new beginning for India, it will encourage taxpayers to be honest, says PM Modi

New Delhi: Stressing his government's resolve to fight graft and root out black money, Prime Minister Narendra Modi on Saturday said that some three lakh companies have been under the scanner post demonitisation.

The implementation of the Goods and Sales Tax (GST) will chart a new chapter for the Indian economy as it will make it extremely difficult for tax evaders, PM Modi said adding the new system will usher in prosperity for all.

GST will encourage taxpayers to be honest, he stressed.

“The impact of our steps to check black money is clear from the latest Swiss banks figures as money deposited by Indians dipped to record low,” he said.

Further driving home his point, the prime minister said, “People get electricity in their homes with the taxes paid by them.”

“Only 32 lakh people in our country declare their income in excess of Rs 10 lakh,” he said while addressing a gathering on the occasion of Foundation Day of the Institute of Chartered Accountants of India at the Indira Gandhi stadium.

He exhorted the chartered accountants to take charge of bringing their clients to path of honesty, saying a “wrong audit can impact lives of gullible investors.”

“Your signature is more powerful than prime minister's,” he said, urging, “Please do not break the trust that is placed on you.”

Highlighting his governemnt's determination to fight the menace of corruption, PM Modi said, “Demonetisation was a necessary step against corruption and black money, and the GST will root out black money.”

He said that his government is committed to take more tough action against firms helping to hide black money.

“We are not concerned about political implications,” Modi said.

“A country where a select few loot, such a nation cannot scale new heights. These select few never want the nation to grow.

“Government has cancelled the registration of over 1 lakh companies and more than 37,000 shell firms have been identified for strong action,” PM said.

He said that post demonetisation, data mining shows that over three lakh registered companies indulged in suspected dealings.

He emphasised it would become more difficult for people stashing illicit funds in Swiss banks once automatic tax information exchange regime begins between India and Switzerland.

Taking a dig at the previous government, he said the amount had risen sharply by 42 per cent in 2013, referring to a period when the Congress-led UPA regime was in power.

In an hour-long speech at the foundation day function of the Institute of Chartered Accountants of India (ICAI), the prime minister sought to send out a strong message against chartered accountants trying to help entities in black money dealings even as he underlined their powers and responsibility.

Modi also wondered as to why action has only been taken against just 25 of them for irregularities, while more than 1,400 cases have been pending for many years.

According to him, CAs need to safeguard society's economic health and they have a big responsibility.

He exhorted them to take charge of bringing their clients to path of honesty and said a wrong audit can impact lives of gullible investors as people take investment decisions on the basis of their audit reports.

While stating that there are four goals of a human being -- dharma, arth, kama and moksh -- Modi said that in the economy, it would not be wrong to say that chartered accountants are rishi munis (saints).

Alluding to the concept that even if one member of a family breaks the rules, then the family ends, Modi urged the CAs to lead their clients on the path of integrity.

"Your patriotism is no less than mine" in ensuring the development of the country, he said.

While emphasising that the CAs have been given a new opportunity with the GST where they also have a crucial role to play, the prime minister urged them to start preparing the roadmap for 2024 -- when the institute would be completing 75 years.

"Never let the opportunity slip out of your hands," he said.

More than two crore went on foreign trips last year but there are only 32 lakh people who have declared income above Rs 10 lakh, Modi said and wondered whether there can be only that much number of people with high income.

At the launch of GST in parliament on Saturday, Modi said the new tax law will help chart out a new course for the country, and its roll-out should not be seen as the achievement of any one party or government.

"We are deciding India's future course. We will chart a new course for the country at midnight with the launch of GST which is not an achievement of any party or government but a collective achievement. It`s scope is not limited to the financial system," Modi said, speaking in Parliament during a special function to launch the GST on Friday.

President Pranab Mukherjee, Vice President M. Hamid Ansari, Prime Minister Modi along with several cabinet ministers and MPs were present in Parliament.

Modi said with this landmark tax reform measure the dream of "one nation, one tax" will be achieved.