The Lok Sabha on Tuesday passed the Finance Bill 2011 containing the government’s tax proposals. This was done in the Opposition’s absence as the BJP-led alliance walked out of the House after their demand for a debate on the Prime Minister’s statement on the WikiLeaks issue under Rule 193 was rejected. (Later, however, it emerged that such a discussion could take place on Wednesday in both Houses.)
While introducing the bill Mr Mukherjee announced that he was rolling back the controversial five per cent “misery tax” on airconditioned hospitals and healthcare facilities and a few other tax concessions as well. The Opposition NDA wanted the discussion to take place before the Finance Bill was taken up for discussion and passage, whereas the government insisted it be the other way around. In the process there were a few exchanges between Leader of the House Pranab Mukherjee and Leader of the Opposition Sushma Swaraj.
Mr Mukherjee, insisting that the Finance Bill be passed first, said the “heavens will not fall” if a short duration discussion takes place after the government’s financial business was completed. “There is a certain time lag we have to follow for the Finance Bill. First this House will pass it and then it will be sent to the President. From there it will return to the Upper House and then again it will come to this House. All this requires time, and we are left with only three days,” he said.
Responding to Mr Mukherjee’s argument, Ms Swaraj said: “I request that the discussion be taken first, after which we are ready to sit till midnight to pass the Finance Bill. We are aware of our responsibilities. We do not intend to create any constitutional crisis.”
The government, however, did not relent and the Speaker allowed the finance minister to introduce the Finance Bill. Following this, the entire NDA Opposition — including the BJP, JD(U), Shiv Sena and Akali Dal — walked out of the House.
With the Finance Bill’s passage, the Lok Sabha has completed the three-stage budgetary exercise.
Replying to the debate on the bill, Mr Mukherjee also modified his tax proposals relating to readymade garments, dividend tax, personal computers, printers, mobile phones and auto parts.
“The proposed levy on healthcare has raised considerable anxiety in this House and outside. The purpose of the levy was not merely to mobilise revenue. It was to pave the way for the introduction of the Goods and Services Tax. However, I have decided to exempt the new levy in its entirety both in respect of services provided by hospitals as well as by way of diagnostic tests until GST comes into force,” Mr Mukherjee said.
The finance minister also exempted coking coal used in manufacture of iron and steel from customs duty and reduced duty on CKD (completely knocked down) kits containing reassembled engines, gearbox or transmission assembly for the manufacture of vehicles.
The minister, however, imposed one per cent additional excise duty and CVD on mobile handsets.
Announcing some relief for the computer industry, the minister said: “I extend the concessional rate of five per cent CVD and nil SAD (special additional duty) to parts of all computer printers imported by actual users... I also exempted certain special parts of personal computers from levy of (special additional duty) of customs.”