Parliament passes Finance Bill 2017 after Lok Sabha rejects amendments introduced by Rajya Sabha

Parliament on Thursday approved the Finance Bill 2017 after the Lok Sabha rejected five amendments moved to it by the Upper House with regard to curbing more powers to taxmen and a cap on donation by companies to political parties.

Winding up the debate on amendments passed by the Rajya Sabha, Finance Minister Arun Jaitley said they cannot be accepted by the government, but invited suggestions from political parties, including the Congress and the BJD, to make electoral funding more clean and transparent.

The Lok Sabha later rejected the Rajya Sabha amendments by a voice vote, thus passing the Finance Bill 2017 and completing the budgetary exercise for 2017-18.

Jaitley said most of the donations that come to political parties now are from unclean money and there was complete non-transparency.

Defending the budget proposal, he said it is not possible for the Government to accept the amendment as it would limit the number of donors to political parties.

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“The harsh reality is we continue to do politics on the basis of undeclared money, because if we do it on the basis of declared money... somebody will write an editorial and will have a problem with every solution we offer,” Jaitley said.

“Today we have given the option of receiving donations by cheque—there is total transparency, it is clean money.  Small donations by cash less than Rs 2,000. You can receive donations online too. And do it by bonds which is clean money,” he said.

With regard to the taxation amendments proposed by the Rajya Sabha, he said the current position will continue and the government as a matter of “abundant caution” and to protect whistle-blowers, the bill has specified that the “satisfaction note” will not be given to the target of investigation.

Since 1961, he said there is no example that the target of investigation was revealed the satisfaction note which forms the basis of investigation with regard to tax evasion.

“It would be disastrous to do that,” Jaitley said, adding such information can only be given to the courts.

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The Finance Minister, during the course of reply, also took a dig at the Congress, saying if they had a problem with the electoral bonds, they could continue to accept donations by cheque and see how many people donates to them.

The government had on Wednesday faced major embarrassment in the Rajya Sabha as five amendments moved by the Congress and the CPI(M) to the Finance Bill were adopted and approved by the House.

The amendments proposed to delete the provisions relating to the powers given to taxmen like power to requisition books of account, power to survey and more powers to more officers.

The Rajya Sabha also approved an amendment that there should be a cap of 7.5 per cent of net profit of the last three financial years for donation to political parties. It also approved a provision to disclose the name of political parties to which contribution has been made by a company.

“I have an open invitation to all, please suggest to me a better system which will ensure clean money and transparency to the extent possible. I am yet to receive a single suggestion.

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“I am only hearing adjectives like ‘it must be clean’, ‘it must be transparent’. Please give me ideal combination of the two. We are willing to consider it. I will wait for a specific suggestion,” he said.

Roy said during the discussion on the Finance Bill in the House, he had suggested that a separate law should be brought to introduce electoral bonds as the proposal has been included in the “so-called omnibus Finance Bill”.

The TMC MP said the Rajya Sabha has approved deletion of Clause 51 of Section 132a of the Income Tax Act—which deals with powers to taxmen for requisition of books of accounts.  “It is a direct assault on the right of individual”.

Hooda said there was a need for “checks and balances” on taxmen and they should put on file the objective for conducting survey, search and raid, otherwise there would be no accountability.

Bhartruhari Mahtab (BJD) sought to know since when was there a provision in the Income Tax Act, 1961, that the person whose House is being searched, or raided is disclosed the reason.

Kirit Somaiya (BJP) said that through an amendment, the Government has sought to ensure the security of the whistleblower who tips off taxmen with information.

“Shell companies were born during your tenure and we want to end it. Shell companies are only used for money laundering,” Somaiya said.

Expressing apprehensions, B Mahtab (BJD) questioned whether the political parties should run with funding from the corporate sector. “The floodgates would be opened for corporate funding for political purposes,” Mahtab said.

He also said that political parties in power may benefit from the corporate houses but will such benefits accrue to them when they are out of power.

Mahtab insisted that there should be transparency with regard to political funding and added that it is necessary to make political system corruption-free.

Badaruddoza Khan (CPI-M) said corporate funding to political parties has opened the gateway for black money.

RSP member N K Premachandran the Rajya Sabha amendment, which was moved by CPI(M) leader Sitaram Yechury for disclosure of names of political parties which were given funds by a company, should be accepted.

Anandrao Vithoba Adsul (Shiv Sena) also insisted that there should be transparency in political funding and a limit on the money which is given to a party.