It may be noted that a Money Bill
cannot be introduced in the Council of States, i.e. the Rajya Sabha. Once the Lok Sabha, i.e. House of People, passes the Money Bill, it is sent to the Upper House for its recommendations. The Rajya Sabha, however, can neither reject nor amend the Bill and must return it within 14 days. Once the Bill is sent back, the Lok Sabha may choose to accept or reject all or any of the said recommendations.
Moreover, Article 110(2) provides that a Bill would not be a Money Bill
merely by reason that it provides for imposition of fines or penalties or payment of fees for licenses or for services or by reason that it provides for imposition, abolition, remission, alteration or regulation of any tax by a local authority. Hence, where a question arises as to whether a Bill is a Money Bill
or not, the power has been conferred upon the Speaker of the House of People to give a final decision.
For the purpose of introducing GST in the country, the 122nd Constitutional Amendment Bill, 2016, was passed by both Houses of Parliament and then ratified by 50 per cent of the state legislatures. The Bill then received the Presidential assent and same was notified as the 101st Constitution Amendment Act, 2016. This was in accordance with Article 368 of the Constitution that mandates ratification by half of the state assemblies for cases listed under clause (2). These cases include amendment to provisions of Article 54, Article 55, Article 73, Article 162, Article 241 or Article 279A or any provisions mentioned in Chapter IV of Part V, Chapter V of Part VI, or the provisions listed in Chapter I of Part XI, or any provisions mentioned in the lists mentioned in the Seventh Schedule of the Constitution.
Consequently, the GST Council was constituted in terms of Article 279A, and vested with powers to make recommendations to the Union and states on important issues related to GST.
In its 28th meeting held in July 2018, the GST Council had recommended the first-ever revision to the GST legislation and these changes were proposed by way of GST Amendment Bills of 2018. The four Bills were passed by Parliament on August 24, 2018.
Subsequently, these amendments were implemented through notifications.
However, with the introduction of Finance (No. 2) Bill, 2019, it seems that for the first time since the advent of the new indirect tax regime, the government has sought to bring in amendments to GST legislation through the Finance Bill.
This poses certain questions as to whether the government can amend the GST law by including the proposals in Finance Bill.
Would this be a trend of the Modi Government 2.0 to introduce amendments to GST legislation during the Union Budget, subject to the GST Council recommendations? And above all, can the government propose any amendment in the Bill which goes beyond the recommendations of the GST Council?
Considering that GST is a ‘tax’ covered by Article 110(1) of the Constitution, the government seems well within its ambit to amend the law through the Finance Bill, which is also a Money Bill. As regards the last question, looking at the mandate of Article 279A of the Constitution, a detailed analysis of the fine print would tell that the government has gotten away with a cheeky run!
Dosh is executive director and Nadkarni is manager at SKP Business Consulting.
The views are personal