Tax dispute turns political as India freezes opposition accounts
India’s main opposition party accused national authorities on Thursday of crippling its political activities by blocking the party’s access to its bank accounts, in what it described as a heavy-handed response to a tax dispute just weeks before the crucial general election.
Officials from the party, the Indian National Congress, said eight of 11 main accounts in four banks had been frozen and there was no clear indication when the party would regain access to the money.
“We cannot support our employees; we cannot support our candidates,” Indian National Congress leader Rahul Gandhi said at a news conference in New Delhi. ‘Our leaders cannot fly. Forget flying, they can’t take a train.”
“Our ability to fight elections has been damaged,” he said.
Campaigning is underway for the six-week elections that start on April 19 and will determine the next prime minister for the world’s most populous democracy. To run election campaigns from the Himalayas to India’s southern coasts, political groups are spending billions of dollars in what is seen as one of the most expensive elections in the world.
Under Indian law, political groups are exempt from paying income tax on their private and corporate funding, but must declare their income to tax authorities every year. The current dispute concerns how severely the Indian National Congress should be punished for past irregularities.
Last month, the country’s income tax department, which is controlled by Prime Minister Narendra Modi’s government, froze the Congress party’s accounts on allegations that it had been 45 days late in filing tax returns on its cash contributions for the 2017 financial year. 2018. The department also took from the party bank accounts Of the $16 million he said was owed in fines, $2 million was owed.
The Congress party has acknowledged that it filed tax returns late, but says the fine should be in the thousands of dollars instead of the millions.
Last week, a Delhi high court refused to interfere with the tax authorities’ order, saying it could not prevent authorities from freezing the party’s accounts.
In recent years, opposition groups have accused Mr. Modi’s ruling Bharatiya Janata Party of establishing a virtual monopoly on political financing. They accuse Modi of using his office’s powers to enrich his party and dry up funding for competitors.
Congress party leaders said freezing the accounts so close to elections was a political move aimed at paralyzing India’s main opposition group and pushing the country towards one-party rule.
“The idea that India is a democracy is a lie,” Gandhi said.
Mr Modi’s officials rejected the claims, describing them as a desperate attempt by a political opposition struggling in an election campaign that is likely to return the BJP to power.
Ravi Shankar Prasad, a ruling party leader, said the tax exemption for any political group would remain valid only if the group declared any contributions to national tax authorities on time.
“In total desperation over the impending defeat, the Congress party at the highest level today tried to create an alibi,” Prasad said on Thursday.
The issue of political financing has exploded in India in recent weeks. The country’s highest court recently forced the government-owned State Bank of India to release a list of all those who had made anonymous political donations through a financing mechanism known as ‘electoral bonds’. helping those in power.
Mr Modi’s party received the largest amount of the funds, more than ten times what went to the Indian National Congress.