Busier days are ahead for Finance Minister Arun Jaitley, as Parliament resumes the Budget Session. The second leg of the Lok Sabha starts on Monday, while the Rajya Sabha will have start a new session from April 23. Both Houses will have sittings till May 8.
The most important task for Jaitley in the next 18 days will be to steer consideration and passage of the Finance Bill, 2015 and conclude the Budget-making exercise. The Bill, tabled on February 28, has key tax provisions, such as changes in the Income-Tax Act for more benefits and increase in the service tax rate to 14 per cent from 12.36 per cent, among others.
Once the Bill is passed, changes in the Income-Tax Act will come into effect from April 1, or any date, as prescribed in the Bill, while the Government will notify a date for imposition of higher service tax. The Bill also has significant non-tax provisions, such as setting up a new Public Debt Management Agency (considered a step toward stripping some of RBI’s power) and merger of the Forward Markets Commission with SEBI, besides others.
Unlike the land, coal or mines Bills, the Finance Bill will not face any problem in the Rajya Sabha despite the Government being in a minority. Since it is a money Bill, the Rajya Sabha can debate, but cannot make any amendment or vote on it. If the Upper House fails to return the money Bill within a specified period to the Lok Sabha, the Bill will be considered as passed, after which it will become Act with assent from the President.
Another key legislation is the Constitution Amendment Bill for introduction of Goods & Services Tax (GST). This Bill was introduced during the Winter Session and will now be taken up for consideration and passage. The new tax regime aims to remove the cascading effect of taxes and provide for a common national market for goods and services.
For this, the Constitution needs to be amended to confer concurrent power on the Centre as well as States & Union Territories with Assemblies to make laws for levying taxes on every transaction of supply of goods or services, or both.
After approval from both Houses, the Bill needs to be ratified by at least 15 State Legislatures, followed by Presidential assent, before it becomes a law. The government intends to introduce the new indirect tax reform from April 1 next year. The Bill was introduced in the Lok Sabha on December 19.
Since the government is in a complete majority in the Lower House, it will have no problem in getting the Bill passed. Though the government is in a minority in the Rajya Sabha, this Bill is unlikely to face any resistance as the principal Opposition party, the Congress, is backing it.
However, the land Bill will face a tough time as the Congress is dead against the new Bill and the Opposition is in a majority in Rajya Sabha. The Bill got the Lok Sabha’s nod during first leg of the Budget session. Seeing strong opposition, the government prorogued the Rajya Sabha to facilitate re-promulgation of the Land Ordinance.
Now, Constitutional provisions require replacement of the ordinance by Parliament, failing which it will lapse again. There are talks of a joint session to get the Bill passed. But, this will be possible if the Rajya Sabha rejects the Bill or it is pending there for six months.
Source : thehindubusinessline.com