Dear Professional Colleagues,
Rajya Sabha adjourns sine die without passing the GST Bill
With the Prime Minister Shri. Narendra Modi Government going hammer and tongs using its majority in Lok Sabha to clear legislative agenda, Shri. Modi’s reform agenda suffered a major blow on Thursday, August 13, 2015, when the lawmakers ended the Monsoon Parliament session without approving the much awaited Constitution (122ndAmendment) Bill, 2014 on Goods and Services Tax (“GST Bill” or “122nd CAB”) aimed at boosting economic growth by harmonising a mosaic of State and Central levies replacing a chaotic structure that inflates costs.
The Monsoon session of the Parliament, which saw protests between the Government and the Opposition, has been a complete washout. However, on the second day of the session, i.e. on July 22, 2015, Select Panel of the Rajya Sabha managed to submit its Report on the GST Bill amid Opposition furore over the Lalit Modi row.
The Central Government tried to give it final push to the GST Bill in the Rajya Sabha on the last day of the Monsoon session but Monsoon session of the Parliament has ended without a scrap of work being done as all appeals by the Central Government to let the Government function were drowned amidst the voices of the relentless Congress. The Rajya Sabha adjourned sine die and the Centre’s most important reform Bill remained in the Upper House without it being passed.
Whether Joint session can be called?
The Joint session is a rare law-enacting instrument used rarely, last time by the Vajpayee-led NDA Government on March 26, 2002 to get the contentious Prevention of Terrorism Act (POTA) passed. The other two laws enacted by the Joint session were Dowry Prohibition Bill on May 9, 1961 and Banking Service Commission Repeal Bill on May 16, 1978.
The President is empowered under Article 108 of the Constitution of India to summon a Joint session of the Parliament on the advice of the Government “for the purpose of deliberating and voting on the Bill”. There are, however, three caveats:
(i) If a Bill passed by one House but rejected by the other; or
(ii) If disagreement between the two Houses on amendments to the Bill; or
(iii) When more than six months have lapsed after the date of receipt of the Bill by the other House without passing it.
Thus, calling a Joint session to make up the difference is not an option for two reasons viz. GST Bill was struck in the Rajya Sabha with Oppositions neither saying yes or no and for a Constitutional Amendment Bill, it needs to be passed separately in each house by a 2/3rd majority of the members, present and voting.
Extending the session after break
Still keen to ensure passage of the GST Bill, the Centre has kept its option open of reconvening the session with the Cabinet Committee on Parliamentary Affairs on Thursday deciding not to recommend immediate prorogation of the Houses after they are adjourned sine die.
According to a Government strategist, the Government might even call a Special session. But any such decision will need to have the Opposition, particularly the Congress, on board and will need to factor in the Bihar State polls expected in end-October.
If a Special session is called, the Rajya Sabha will take up the GST Bill and vote on the amendments suggested by a Select panel. If the GST Bill passes, it will be forwarded for passage to the Lok Sabha, where the Government has the numbers.
Advancing Winter session by a fortnight
Another Government strategist expressed the hope that the deadline could still be met if the Winter session of the Parliament could be advanced and at least half the States ratify the GST Bill soon after it is passed by the Parliament, enabling the two Houses to take up other GST related Bills in the Budget session. Either of these scenarios could work only if the Government manages to reach out to a Congress leadership livid after the personal attacks on it by External Affairs Minister Sushma Swaraj and Finance Minister Arun Jaitley.
GST Bill hangs midway: April, 2016 deadline under mist
The virtual closing of the Monsoon session without any major business being transacted is a blow to the Government which was looking to get major pending legislations, including the GST bill, passed in both houses of the Parliament so as to get the economy back on track.
The delay in the passage of the GST bill has put a question mark on the planned roll out of the GST era by the appointed date of April 1, 2016 which now seems to be cumbersome task for the Government to meet a self-imposed deadline.
The GST Bill which will subsume all Indirect taxes into one uniform levy across the Country, has to be first passed in the Rajya Sabha with 2/3rd majority followed by its ratification by at least 50% of the States before it becomes law of the land. Following this, the Government will set up the GST Council within 60 days from the date of commencement of 122nd CAB, with the Union Finance Minister as the Chairman and Minister of State, Finance & the State’s Finance Ministers as members to decide on the crucial issues of the final design of GST, including RNR and the threshold level or the revenue level beyond which GST will be levied on traders, etc.
This may not leave too much time for the Trade and Industry to prepare for GST.
However, if the legislation fails to enter the statute book by appointed time frame, it may obstruct the Government’s ‘victory’ and ‘triumphant march’ towards economic progress. The Government now needs to devise a persuasive but effective strategy if they actually plan to convert their words into action.
Source: Compilation from Business Standard, IBN Live and other News Columns
Hope the information will assist you in your Professional endeavours. In case of any query/ information, please do not hesitate to write back to us.
Thanks & Best Regards,
FCA, FCS, LLB, B.Com (Hons)
Flat No. 34B, Ground Floor, Pocket – 1,
Mayur Vihar, Phase – I,
Delhi – 110091, India
Desktel: +91-11-22757595/ 42427056
Mobile: +91 9810604563
House No. 908, Sector 12-A,
Panchkula, Haryana – 134115
Ist Floor, 10 R G Kar Road
Shyambazar, Kolkata – 700 004
Face book: http://facebook.com/bimal.jain.90
Disclaimer: The contents of this document are solely for informational purpose. It does not constitute professional advice or recommendation of firm. Neither the authors nor firm and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any information in this document nor for any actions taken in reliance thereon.
Readers are advised to consult the professional for understanding applicability of this newsletter in the respective scenarios. While due care has been taken in preparing this document, the existence of mistakes and omissions herein is not ruled out. No part of this document should be distributed or copied (except for personal, non-commercial use) without our written permission.