Parliament passes Finance Bill 2017, decks cleared for budget implementation

Parliament passes Finance Bill 2017, decks cleared for budget implementation (कार्यान्वयन) 

New Delhi: The Lok Sabha has approved the Finance Bill 2017, clearing the decks for an earlier-than-usual implementation of the Union budget. The budget for 2017-18 will focus on outcomes and include a host of reforms initiatives, including on electoral funding, ease of doing business and discouraging unaccounted wealth (बेहिसाब धन) generation by limiting cash transactions in the economy. The lower house cleared the Bill rejecting five amendments recommended by the Rajya Sabha, where the ruling coalition(गठबंधन)  is in a minority.

With this, the tax proposals in the Budget and the reform measures introduced later in Lok Sabha as amendments to the Finance Bill including merger of tribunals, a Rs2 lakh cap on cash transactions meant to curb tax evasion and encouraging digital payments and mandatory use of Aadhaar for filing income tax returns from 1 July will become law once the bill receives Presidential assent(सहमति).

Compulsory use of Aadhaar will ensure an electronic trail of all high-value transactions.

FY2018 is crucial for the National Democratic Alliance government, which is gearing up for implementing the goods and service tax (GST)—the biggest tax reform since independence and for consolidating gains in the fight against unaccounted wealth.

Finance minister Arun Jaitley sought to allay concerns of some opposition MPs on electoral funding and empowering tax officials to protect whistle blowers. Rajya Sabha had on Wednesday recommended amendments to the Finance Bill as approved by Lok Sabha on 23 March on motions moved by Congress party’s Digvijay Singh and Sitaram Yechuri of the Communist Party of India (Marxist).

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The minister said Yechuri’s proposal to reinstate the cap on political donations by companies could only limit the sources of legitimate political funding. On Digvijay Singh’s concerns that ‘inspector raj’ will be the outcome of tax officials not having to disclose the source of a tip-off that leads to a raid on someone’s premises, Jaitley said it was important to protect whistleblowers.

Explaining the rationale behind the removal of the cap on political funding by companies—7.5% of net profits for previous three financial years—Jaitley said if clean money is to be available for political activities, it was not wise to restrict the constituency of donors.

“Today, there is no restriction on political funding by an individual, a Hindu undivided family or a partnership. If we restrict the constituency and number of people who can donate and the quantum they can donate, then the tendency to move towards cash donations will always be higher,” said the minister.

He explained that company balance sheets will disclose the quantum of electoral bonds purchased by them. Any political party keen to accept cheques has that option also. The minister said the present system has two features—unclean money and a totally non-transparent system.

Jaitley rejected Rajya Sabha recommendations to delete three proposals in the Finance Bill—clauses 51,52 and 53—regaridng whistle blower protection by tax officials, saying that the proposal was brought in as a matter of abundant caution. “This is not a violation of human rights. There is a larger public interest in this,” the minister said.

Lok Sabha is not bound to accept the amendments recommended by Rajya Sabha, where the ruling BJP and allies are in minority, as the Finance Bill is a money bill.

Digvijay Singh had claimed in the Rajya Sabha that not disclosing tax officials’ internal note on the assessee, which includes details of the informant, will give unbridled powers to even junior officers in the tax department.