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What is the debate of Financial Bill and Money Bill for GST?




Indian parliament is all set for the most important session of the present Government starting from 16.11.2016. It is expected that the discussions will largely be confined to GST Bill, Black Money and demonetization.

Since Modi Government has majority in Lower House of Parliament i.e. Lok Sabha, it will try to present the GST Bill in form of money bill rather than financial bill. Why opposition wants the bill to be presented as financial bill, let us discuss that ahead.

Money bill is one which amends the taxation powers/revenue structure of centre/state government. As per the provisions of the Constitution of India, if a money bill is passed by lok sabha it has to be transferred to Rajya sabha. Rajya sabha may either accept the bill as such or propose the amendment and send it back to Lok Sabha. It is up to lok sabha to decide whether bring the proposed amendments or not. There is no binding on lok sabha and it can pass the bill without making those amendments. If in case Rajya sabha does not return the bill within 14 days, the bill is deemed to be passed. As such in case of Money Bill, Rajya Sabha’s power is defunct.

Financial bill is one where the bill contains both money bill provisions and other issues to be discussed in parliament. In case of financial bill, it has to be passed by majority present in both houses i.e. Lok Sabha & Rajya Sabha. In such cases Rajya Sabha plays an equal role as Lok Sabha does. In this circumstances the ruling party would be reluctant to present a bill as financial bill  if they lack majority in Rajya Sabha.

Looking at the difference of money bill and financial bill, the BJP Government which has special majority in Lok sabha would like to bring GST Bill as Money Bill so that it does not get stuck in the upper house of Parliament. As the ruling party lacks majority in Rajya Sabha, opposition will make all the efforts in order to ensure that GST Bill is presented as Financial Bill so that the target of the government to roll out GST from 01.04.2017 can be postponed, Even if the opposition is able to defer the enforcement of biggest indirect tax reform, it will not be able to take it beyond September 2017. Hence we should not worry about these issues and rather prepare ourselves for the new tax regime.     

by:
 Keshav R Garg
(B.Com, CA, CS, ISA(ICAI))
Faculty for GST: Indirect Tax Committee of ICAI
Author: Bharat's GST Ready Reckoner
            A Handbook on GST
Adviser for GST: Industries Association of Chandigarh 
Member: Indirect Tax Committee of CII, PHDCCI, MyGst.MyTax Foundation
Address: 3328, Sector 27 D, Chandigarh, India - 160 019
Phones: +91-172-461-3328, +91-98880-90008
Mails: mygst.mytax@gmail.com, keshavgarg@kdai.in

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