The document discusses the difference between introducing the GST bills as a "Money Bill" versus a "Finance Bill". A Money Bill allows the Lok Sabha greater power due to restrictions on the Rajya Sabha's ability to amend or reject it. Introducing GST as a Money Bill would suit the government given its majority in the Lok Sabha. However, opposition parties prefer it be a Finance Bill to allow greater scrutiny and debate by the Rajya Sabha. The Finance Minister has refused to commit to either approach.

1. MONEY BILL VS. FINANCE BILL
K. VAITHEESWARAN,
Advocate
vaithilegal@yahoo.co.in
On the 3rd
of August, the former Finance Minister Mr. P. Chidambaram put
forth a passionate plea and sought the assurance of the Finance Minister that the
GST Bills would only be introduced as ‘Finance Bill’ and not ‘Money Bill’.
Similar plea was made by almost all the members of the Parliament at the time
of the debate on the 122nd
Constitutional Amendment Bill. The Hon’ble
Finance Minister Mr. Arun Jaitley refused to give the assurance, that it would
only be a Finance Bill on the ground that the Bill itself is not ready and that he
would go by the Constitution.
Article 368
In terms of Article 368, any amendment to make any change in any of the Lists
in the Seventh Schedule requires to be approved by a majority of not less than
2/3rd
of the members of either house present and voting followed by ratification
by not less than 50% of the legislatures. The first part of the exercise stands
completed on the Rajya Sabha passing the 122nd
Constitutional Amendment
with 2/3rd
majority. Once the ratification happens at 50% of the State
Legislature and the President gives the assent, the Constitutional Amendment
Act would be in place but in terms of Section 2(1) of the Amendment Act, it
shall come into force on such date as the Central Government by Notification in
the Official Gazette appoint.
Article 246A
Article 246A when notified would empower the Parliament and the Legislature
of every State to make laws with respect to goods and services tax imposed by
the Union or by such State. Under Article 246A(2), Parliament shall have the
exclusive power to make laws in respect of goods and services tax where the
supply of goods or services or both takes place in the course of inter-State trade
or commerce.

2. The question is whether the Central GST Bill and the IGST Bill which would
be introduced by the Parliament needs to be introduced as a ‘Finance Bill’ or a
‘Money Bill’.
Money Bill
Article 110 defines ‘Money Bill’ and a Bill shall be deemed to be a Money Bill
if it contains only provisions dealing with
(a) imposition, abolition, remission, alteration or regulation of any tax;
(b) regulation of the borrowing of money or giving of guarantee by
Government of India;
(c) custody of the Consolidated Fund or the Contingency Fund of India, the
payment and withdrawal from such fund;
(d) the appropriation of moneys out of the Consolidated Fund of India;
(e) declaration of expenditure charged on the consolidated fund or increase
in the amount of expenditure;
(f) receipt of money on account of consolidated fund or the Public Account
of India;
(g) any other matter incidental to any of the matters specified in (a) to (f)
above.
In terms of Article 109 a Money Bill shall not be introduced in the Council of
States (Rajya Sabha). Once the Lok Sabha passes the Money Bill, it shall be
transmitted to the Rajya Sabha for its recommendations and the Rajya Sabha
shall within a period of 14 days from the date of receipt return the Bill to the
Lock Sabha with recommendations.
The Lok Sabha may thereupon either accept or reject all or any of the
recommendations of the Rajya Sabha. Further, if the Rajya Sabha does not
return the Bill within the said period of 14 days, it shall be deemed to have been
passed by both Houses at the expiry of the said period in the form in which it
was passed by the Lok Sabha.

3. Article 117 provides that a Bill or amendment for any of the matters specified
in Article 110(a) to (f) shall not be introduced or moved except on the
recommendation of the President and the Bill making such provision shall not
be introduced in the Council of States.
Finance Bill
The zeal for a Finance Bill is apparent since the ruling NDA does not have a
majority in the Rajya Sabha and the elders could very well raise issues and seek
reference to a Select Committee of the Parliament which will ensure that GST is
delayed. Similarly, the reluctance in giving an assurance to introduce as a
Finance Bill is also apparent, since introduction of a Money Bill would suit the
Government given the urgency for implementation of GST and the majority it
enjoys in the Lok Sabha.
When the CGST Bill and IGST Bill is introduced as a Money Bill in the Lok
Sabha then even if the Rajya Sabha returns the Bill with modifications, it has
very little role to play given the strict time frame and the power of the Lok
Sabha to reject the recommendations.
Article 111 further strengthens the Money Bill since while a President can
return a Bill with a message requesting both houses to reconsider the Bill or
suggest any amendment, no such power is available to the President in the case
of the Money Bill.
Lok Sabha Speaker
Article 110 is divided into three segments where Article 110(1) deals with what
are the matters that would be deemed to be a ‘Money Bill’; 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. Article 110(3) provides
that if any question arises whether a Bill is a Money Bill or not the decision of
the Speaker of the Lok Sabha shall be final.

4. Union Budget
Every year, at the time of the Budget, the Finance Bill is introduced as a Money
Bill in the Lok Sabha. New levies such as service tax in 1994; securities
transaction tax; dividend distribution tax; banking cash transaction tax; fringe
benefit tax; special additional duty (SAD) were all Money Bills and some of
them were during the period when Mr. Chidambaram was the Finance Minister.
Article 366(12A) which is part of the 122nd
Amendment defines ‘GST’ as any
tax on such of goods or services or both except taxes on supply of the alcoholic
liquor for human consumption. GST is indeed a new levy but it is still a tax and
Article 110(1)(a) very well covers the imposition, abolition, remission,
alteration or regulation of any tax.
Whatever be the issue the citizens of the country woke up to the concept of
legislative procedures and the Parliamentarians have succeeded in involving the
media and the public in the debate on the distinction between a Money Bill and
a Finance Bill.