GST Updates

Opposition wants CGST/IGST Bill, 2016 as Financial Bill-Why ?

In the previous update, we had discussed various provisions of how a bill is classified as Money Bill or a Financial Bill. CGST/IGST Bill is going to be put before by the Government before the Parliament in the winter session commencing from November 16. The passage of the 122nd Constitutional Amendment Bill ended with the Opposition hell bent on the assurance from the Government that these bills would be brought in as Financial Bill and not as Money Bill.  How CGST/IGST Bill being put as Financial Bill gives Rajyasabha a greater and decisive role to play can be accessed from Article 109 of the Constitution of India which is as follows:

a) Article 109 of the Constitution of India

The reason behind opposition insisting that CGST/IGST Bill be brought as Financial Bill stems from Article 109 of the Constitution. Article 109 of the Constitution provides as follows

  1. Money Bill shall always be introduced in Loksabha.
  1. Money Bill passed in Loksabha is sent to Rajyasabha for recommendations. The recommendations are to be sent within a period of 14 days of the receipt of the Bill by the Rajyasabha.
  1. These recommendations are not binding upon Loksabha and Loksabha may either accept or reject any or all recommendations from Rajyasabha.
  1. Even if Loksabha accepts or rejects any or all of the recommendations of Rajyasabha, it would be deemed that the Money Bill has been passed by both the houses in the former case with the amendments recommended by Rajyasabha and accepted by Loksabha and in the latter case in the form as sent by Loksabha without any amendments recommended by Rajyasabha.
  1. If the recommendations are not sent by Rajyasabha within a period of 14 Days from the date of receipt of the Money Bill, then bill shall be deemed to have been passed by both the houses in the form as passed by Loksabha.

b) Comparative Analysis of how different bill are required to be passed in two houses:

  1. Money Bill:Money Bill has to be passed by Loksabha only and Rajyasabha has the power to make recommendations which are not binding upon the Loksabha.
  1. Financial Bill Category A:This bill has to be introduced in Loksabha first on the recommendation of the president and once passed by Loksabha would have to be approved by Rajyasabha.
  1. Financial Bill Category B:This bill can be introduced in either house on the recommendation of the president and once passed by either house, same would have to be approved by the other house.

c) Analysis of why opposition insists on CGST/IGST Bill being brought as Financial Bill:

First things first that Congress has a majority in Rajyasabha and can regulate things in Rajyasabha.

Rajyasabha has a greater role to play in the passing of the Financial Bills as Financial Bills have to be approved by Rajyasabha along with Loksabha. In case of Money Bills, role of Rajyasabha is limited to provide a set of recommendations which are not binding upon Loksabha. In the case Financial Bill, if Rajyasabha wherein Congress has majority in the present scenario continues to block the bill on issues and insists upon amending or incorporating certain provisions under the law, then only option left is joint sitting of both the houses of the Parliament.

Insistence of CGST/IGST Bills being put as Financial Bills emanates from the facts that Congress and the Opposition does not want to be sidelined and wants a greater role to played in the passing of the Bills, however from the point of view of the Government it seems that see that if the CGST/IGST Bills are put before the parliament as Money Bills then there would be clear road ahead as they have majority in Loksabha and Rajyasabha only has the power to recommend any suggestions but does not have any further major role to be played.


d) Role of the Speaker of Loksabha holds the Key: Article 110 of the Constitution

Now in the entire episode of a money bill or a financial bill, decision rests with the Speaker of Loksabha and his decision is final in that matter. As per Article 110(4) of the Constitution of India, Speaker of the Loksabha endorses a certificate signed by him on every Money Bill to the effect that it is a Money Bill, before the Bill is sent to Rajyasabha or presented to the President for assent.

CGST/IGST Bills are to be put before the parliament in the winter session very soon and it would be interesting to see the political tables turn and how they eventually happen. Whether CGST/IGST Bills would be able to see the light of the day with the current ban of 500/1000 Rupee notes being agitated by Opposition and if they do, how far government is able to take them.

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