New Delhi, March 14, 2018

Opposition upset over quick passage, dub it as ‘blot on democracy’

Riding on the brute majority that it enjoys in the lower house, the Modi-led government on Wednesday got the Finance Bill 2018 passed by the Lok Sabha without any discussion or separate voting on the demands for grants of any of the ministries.

Minutes after the House re-assembled at noon, Lok Sabha Speaker Sumitra Mahajan guillotined all the outstanding demands for grants in respect of the Union Budget for 2018-19. In a span of a little over 30 minutes, the entire crucial second and third leg of the budgetary process was completed by the lower house amidst din and protests from the Opposition Members of Parliament.

Also passed amidst the din was the fourth batch of supplementary demand for grants that authorised the Centre to draw Rs.60,500 crore for compensating the States for GST revenue losses.

This is the first time during the current NDA regime that the Lok Sabha had not discussed and voted even a single Ministry’s demand for grants and the Finance Bill got passed without an opportunity for opposition to raise issues on the amendments, say economy watchers.

It may be recalled that the second leg of the budget session, which started on Monday last, saw any meaningful proceedings over the last seven working days, thanks to the Opposition protests on Andhra Pradesh issues, PNB scam etc.

Opposition cry foul

Reacting to the developments in the lower house, Congress Chief whip Jyotiraditya Scindia said “Wednesday was black day for the democracy of the country”.

“It is a blot on democracy. The most important Finance Bill was allowed to get passed amid din. The Centre did not allow any debate, any exchange of ideas and suggestions on the Bill. They throttled the democracy in Parliament,” Scindia said.

BJD leader Bhartruhari Mahtab termed the passage as “unfortunate”.

“This is most unfortunate incident in the history of Parliament. All demands for grands were guillotined without any discussion,” he said. CPI(M) MP Mohammed Salim said the Centre did not want a discussion on the crucial issues faced by the country.

“This is a political crisis. Such an arbitrary action hasn't happened in the history of Indian Parliament,” Salim said.

Breaking the logjam

As soon as the lower house assembled, Lok Sabha Speaker Sumitra Mahajan, based on the request of the Parliamentary Affairs Minister Anant Kumar, announced that the guillotine on outstanding demands for grants of 2018-19 will be taken up at just after noon instead of the earlier set time of 5 pm on Wednesday.

“Sittings of the House has been disrupted continuously for the past few days. Keeping in view the urgency of the transaction of the financial business, we cannot defer the same any longer”, she said.

21 amendments

In all Finance Minister Arun Jaitley moved 21 amendments to the Finance Bill 2018. Several amendments sought to clear the air on certain ambiguities and anomalies that had crept in the Finance Bill on the new long term capital gains tax (LTCG) regime.

Indexation benefit has now been allowed to shares which were unlisted as on January 31, 2018, but are listed on the date of transfer which happens to be on or after April 1, 2018. The government also sought to tighten the loop further on foreign companies to tax their digital presence in India. Start-ups had some relief with the amendment introduced to link the turnover limit of Rs.25 crore to the year of claim of 100 per cent tax break.

Experts’ take

On the changes to the meaning of ‘Significant Economic Presence’, said Rakesh Nangia, Managing Partner, Nangia & Co LLP, this clearly implies that the government wants to ensure that no stone remains unturned when they are closing in on taxing the digital presence of foreign companies.

Aseem Chawla, Partner, Phoenix Legal, a law firm, said this would further enhance the possible scope of widening tax base with the aim of taxing digital and e-commerce and dotcom companies having otherwise no physical presence in India.

Rajiv Chugh, Tax Partner, EY India, said “this now widens the ambit of digital taxation and how this amendment will evolve needs to be seen”.

[The Hindu Business Line]