The Centre on Tuesday moved a fresh proposal to cap cash transactions at ₹2 lakh instead of ₹3 lakh as provided in the Union Budget, as it introduced as many as 40 amendments to the Finance Bill in an ‘unprecedented move.’
As the Finance Bill was taken up for consideration in the Lok Sabha, Opposition parties like Trinamool Congress (TMC), Biju Janata Dal (BJD) and Revolutionary Socialist Party (RSP) protested against the introduction of the amendments to 40 Acts, saying it was being done in the form of “back-door entry.”
The amendments to the laws like Companies Act, Employees Provident Fund, Smuggling and Foreign Exchange Act, TRAI Act and Information Technology Act, have been moved with an aim of making the functioning of tribunals more efficient by merging the smaller ones and reducing their numbers from 40 to 12.
The objections by the Opposition parties were overruled by Speaker Sumitra Mahajan who ruled that the ‘incidental provisions’ involved in the amendments constitute a ‘Money Bill’ and therefore can be considered as part of the Finance Bill.
Among the amendments made to the Finance Bill was a provision to cap cash transaction at ₹2 lakh. Earlier, while presenting the Budget on February 1, Finance Minister Arun Jaitley had proposed the cap to be ₹3 lakh with effect from April 1, 2017.
A penalty of equal amount would be levied in case of violation of the provision, according to a tweet by Revenue Secretary Hasmukh Adhia after the amendment was moved.
Jaitley defends amendment
Mr. Jaitley, while defending the move to make amendments, invoked first Lok Sabha Speaker G.V. Mavalankar.
He said if a substantial portion of a bill deals with imposition or abolition of tax, then even if it has other incidental provisions, it still can be introduced as a Money Bill.
“You cannot have a bill which says government will spend ₹1,00,000 crore without detailing how it would be spent. You cannot have a bill where you say there will be 5% without specifying what will be the deduction, what will be the power of assessing officer, appeal provision... No tax can be imposed without reference to courts or tribunals… These are incidental provisions...,” Mr. Jaitley said.
The Minister said Opposition’s objection is borne out the language in Article 110(1) and ever since the inception, the House has been debating on the word ‘only’ used in the Article.
As Mr. Jaitley moved the Finance Bill for discussion, N.K. Premanchandran (RSP) said the government is pushing the amendments to the House and not following the rules.
“It is being bulldozed... If you conduct the House like this, then there is no need for the Monsoon and the Winter sessions... (Parliamentary) Standing Committee can be curtailed. The supreme right of Parliament is being taken away,” Mr. Premachandran said.
The government is bringing amendments to the Representation of People Act, RBI Act and SEBI Act, he noted and added, “How can the issue of electoral bond come under Finance Bill? These amendments do not come under the purview of the Finance Bill.”
Mr. Jaitley said the electoral bond has been proposed for cleansing the political money since a lot of electoral funding, across the spectrum, comes from unknown sources.
The Budget has proposed Income Tax incentive for money paid by cheque, or small donation of ₹2,000, or mass collection by digital medium and electoral bond issued under I-T Act.
“How are the Electoral Bonds to be issued? Electoral bonds will not be issued by individuals. RBI will authorise a particular bank to issue electoral bonds. The buyer will buy by cheque and the money will go to the political party in a pre-declared account. RBI may authorise or notify a particular bank,” he said.
Mr. Jaitley said, at present, the Representation of the People Act provides for revealing of identity of people making donations above ₹20,000. The amendment would provide that if money comes by way of electoral bonds, the identity will not be disclosed.
The Finance Minister also said the amendments proposed in the Post Office Act, the Oil Industry Development Act and the Research and Development cess can be made part of the Finance Bill as these squarely come within the purview of Article 110.
Transparency in electoral funding
Deepender Hooda (Congress) said, the government should have brought a separate bill on transparency in electoral funding as amendment to the RBI Act was ‘consequential’ and not ’incidental.’
“Your aim was to bring transparency in electoral funding and that is why you brought amendment to the RBI Act. A separate transparency in electoral funding bill should have been brought,” Mr. Hooda said.
Mr. Hooda said the previous UPA government had given a growth rate of 7.8% in its 10 years of rule which, if calculated as per the new methodology for calculating gross domestic product, translates to 11.3% growth rate.
The Congress member said the investments have declined and growth in non-food credit offtake has dipped to a 60-year low level during the NDA tenure.
The Excise Duty on petrol and diesel has gone up to ₹8.95 per litre and ₹7.96 per litre under the NDA rule, from ₹1.10 per litre and ₹1.35 per litre during the UPA tenure.
“The most retrograde tax is the Excise Duty on petrol and diesel... Whatever the richest man (industrialist Mukesh) Ambani pays, that much a poor farmer will pay... I ask the government to lower the Excise Duty on petrol and diesel by at least ₹5 per litre,” Mr. Hooda said.
As Mr. Hooda took the name of Mr. Ambani, Tathagata Satpathy (BJD) asked the Speaker if the name of someone who is not a member of the House can be taken.
The Speaker said she has been asking MPs to desist from naming individuals who are not members of the House.
Mr. Hooda then said the search and seizure power given to the tax officials as part of the Finance Bill 2017 is a “draconian provision” and against the tenets of natural justice.
'Working towards overall development'
Rakesh Singh (BJP) said the government is working towards overall development of the women, the children, the poor, the youth and the farmers.
Talking about the agriculture sector, he said total foodgrain production is estimated at record levels this year at 272 million tonnes.
“This year farmers have received highest prices for their produce,” he said, adding the farmers got such prices for the first time since Independence.
Citing some examples, he said ‘chana’ prices ranged at ₹8000-₹9000 per quintal, while wheat was at ₹1000-₹1500 per quintal and ‘masoor’ at ₹6000-₹7000.
On Income Tax, he said the previous governments were not able to provide tax benefits up to ₹5 lakh but they are expecting this from the present government.
Mr. Singh said the real estate sector was marred by scams, but this government is moving forward on providing affordable houses in both urban and rual areas.
India is one of the fastest growing economies because of the measures taken by the Modi government, he said, adding several reports have found that India is the best place for making investments.
This year, the government managed record tax collection — both direct tax (₹6.17 lakh crore) and indirect tax (₹7.7 lakh crore), he said, adding Opposition stated that demonetisation is not a good step, but these figures states other story.
The government is also promoting digital transactions to reduce corruption and increase transparency in the system.
Talking about BHIM App, he said over one crore people have downloaded this and the numbers are further increasing.
“The previous government did not utilize the post offices properly, but this government introduced ‘India Post’ payment banks,” Mr. Singh said.
To promote the ‘ease of doing business’, the BJP member said the government announced several measures and has targeted to bring India’s rank within top 50. Currently, it ranks 130th out of 190 economies.
Through the Finance Bill, “we want to bring in better tax system” because we have to take several measures like providing power to in rural areas among others, he said.
M. Chandrakasi (AIADMK) demanded reduction of tax rates for elderly people, saying it will be a “boon” for them as the decision would protect their interests.
He also said that Tamil Nadu should be adequately compensated during the GST implementation till the break-even is reached.
Saugata Roy (TMC) said when the government introduced the Finance Bill in February, it had 150 clauses and seven schedules but now the government has added another 33 clauses and two schedules.
This is “unprecedented and we have already protested,” he said, adding “this government is thinking that they can do anything.”
He also said that the government has included tribunals in the bill which has no relation with the taxation proposals.
He added that the chances for the government to achieve the tax collection target is unlikely because of reasons like “reckless” demonetisation decision of the government.
