The Lok Sabha passed the Finance Bill 2017 on 29th March this year.
The Finance Bill is passed every year after the presentation of the Union Budget to turn the budget into law. But, apart from the usual tax proposals, this year the Finance Bill contains several amendments. This article discusses the controversies surrounding the bill.
Corporate donations to political parties
There was a cap on the maximum amount of political contributions that can be made by a company. This cap of 7.5 % of the net profits of the three previous years has been removed. Also, the companies do not have to disclose the name of the political party to which they are donating.
The Finance Bill also makes it compulsory for companies to make donations to political parties only through cheques, bank drafts, electronic means or electoral bonds. Cash donations are not allowed.
The Government has argued that the cap did not serve any purpose and only limits the sources of legitimate funding for political parties.
Merges 8 tribunals into existing ones.
The tribunals are quasi-judicial bodies which exist for dispute resolution among companies, state governments etc. The members of the tribunals were chosen as per different laws.
As per the new bill, the terms of service will be decided by the Central Government. This will make the tribunals less autonomous and they won’t resolve disputes impartially.
Expand the power of tax officials.
As per the previous act, to conduct a raid, it was mandatory for tax authorities to have “reasons to believe” that the person in question had undisclosed assets, and/or was unwilling to disclose information the IT department needed.
The bill has given power to the taxmen to conduct raids without assigning any reason. It has been applied retrospectively till 1962. This would only lead to a rise in tax terrorism.
Jaitley argued that it was important to protect whistleblowers. Now, the tax authorities do not have to disclose the source of a tip-off that could have led to a raid on someone’s premises.
Mandatory use of Aadhar for filing tax returns.
It will also be mandatory to link one’s Aadhaar card to the PAN card, or the latter will become invalid after July 1, 2017. This could lead to invasion of people’s privacy as every expenditure would leave an electronic trail.
The introduction of finance bill as the money bill.
This was done because Rajya Sabha has limited powers on Money Bills, where the BJP Government does not have a majority. The money bill can be introduced only in the Lok Sabha. When it is passed and sent to Rajya Sabha, it can neither amend nor reject the bill. Lok Sabha has the discretion to choose to accept or reject all or any of its recommendations.
(Read more: //indianexpress.com/article/explained/what-are-money-bills/)
Thus, we can discuss the merits of the amendments in the finance bill, 2017. But, the Government has definitely set a bad precedent of passing the bill in an autocratic manner without giving any opportunity to the opposition to deliberate and discuss on it.
Maam, two questions.
1. “The Finance Bill is passed every year after the presentation of the Union Budget to turn the budget into law” — so is the Finance Bill not passed as Money Bill every year?
2. “Expand the power of tax officials.” — govt is trying to improve Ease of Doing Business. What is the logic behind this step, black money?
1.No. Also, it is passed only to convert the proposals announced in the budget into law. This year the Government introduced many important amendments as well.
2. Yes, this is ostensibly a move to curb black money and also to protect whistleblowers.
even though financial bill makes change in taxes why it is not passed as money bill before 2017?what are the reasons said by govt to introduce it as money bill in 2017?
Mandatory use of Aadhar for filing tax returns.what does it mean?whose aadhar?what tax returns?how aadhar used for filing tax returns and maam i always have doubt how aadhar linked to privacy,plz explain with examples