The passage of the General and Railway budgets was rushed through as the guillotine had to applied to meet the constitutional requirements.
Government today ruled out imposition of wealth tax on agriculture land as the Lok Sabha completed the budgetary exercise in an unusual way with Finance Bill and Demands for Grants for various ministries being passed without debate after Opposition walkout.
Finance Minister P Chidambaram also exempted Railways from payment of service tax for period between July,1,2010 to October 1,2012 to avoid burden on the state-owned carrier.
Making a brief statement while moving the Finance Bill for voting,he introduced an amendment on the issue of wealth tax in view of misapprehensions as to whether it will apply to agriculture land.
“There was apprehension that wealth tax was being imposed on agricultural land. Let me make it absolutely clear that the policy of the UPA government is not to impose wealth tax on agriculture land,” he said.
The apprehensions arose on account of judgements following Punjab and Haryana High Court rulings,Chidambaram said,adding he had worked hard yesterday to prepare the amendment and obtain the approval of the President and “the matter should come to an end.”
BJP staged walk out over the coal issue,while Left,BJD and AIADMK left the House to protest against passage of important bills without discussion. DMK too walked out demanding removal of the JPC chief P C Chacko.
After the walkout,Speaker Meira Kumar said the passage of crucial bills without debate was being done in a “very difficult condition” and it was “immensely painful” for her.
The Speaker said: “The circumstances are such that we have to dispense with discussion and pass these bills.”
As regards other changes in the Finance Bill,Chidambaram said the government is seeking authorisation to raise customs duty on cashew to 70 per cent with a view to protecting the domestic industry.
“We are taking …a tariff cushion to raise the import duty from 30 per cent to 70 per cent so that,if necessary,we can impose a higher duty on imported cashew,” he said.
Referring to the proposal to impose Commodities Transaction Tax (CTT) on non-agriculture items,he said,”Trading in commodity derivatives will no longer be considered as a speculative transaction.”
The Minister also announced changes in the tax laws to attract foreign investments.
“In order to attract investment in long term infrastructure bond,I propose to amend Section 194(H)C so that foreign currency routed through designated account by NRI in such bonds is deemed to be borrowing in such currency,” the Minister said.
He clarified that PAN requirement and consequently higher withholding tax of 20 per cent will not apply to interest paid to non-resident in respect of investment in long-term infrastructure bonds.
“These amendments will attract more investments in long-term infrastructure which is a very important need of the country,” he said.
On the proposal to impose Tax Deducted at Source (TDS) of one per cent on transfer of immovable property,Chidambaram said the person requiring to deduct tax would not be required to obtain TAN (Tax Deduction and Collection Account Number).
“…in order to be helpful to the person who is required to deduct the tax,we are dispensing with the requirement of obtaining a TAN. He need not have a TAN but he must deduct the tax,” he said.
Chidambaram said he had rectified the provisions relating to one per cent tax on cash sale of bullion or jewellery to prevent misuse of the provisions of the IT Act.
“There was an exclusion in parenthesis (of coin or article weighing less than 10 gms)…that exclusion was giving opportunity for misuse. That exclusion has now been withdrawn,” he said.
Later talking to reporters,Chidambaram said changes have been made to make it clear that Tax Residency Certificate (TRC) issued by a foreign government will be accepted as a certificate of residence.
“Additional information can also be asked by the government but the TRC issued by a foreign government will be accepted as a certificate of residence,” he said.
The proposal in Finance Bill 2012 had created uncertainty among foreign investors,especially those routing investments through Mauritius.
The Minister had earlier clarified that the status quo with regard to investment from Mauritius would continue till the double taxation avoidance agreement with that country is revised.
Referring to demand for removal of higher duty on SUVs,Chidambaram said the proposed increase is very small. “98 per cent of SUVs run on diesel. Diesel is subsidised.
So by increasing the duty from 27 per cent to 30 per cent,we are only partially recovering (the subsidy)…from rich people who use SUVs,” he explained.
Oppn walks out,slams ‘corrupt’ govt
Opposition,including BJP,Left and other parties,today walked out of Lok Sabha,charging the government with indulging in one scam after another and saying they would not be party to the passage of the Finance Bill and the Railway Budget.
The Opposition protest came after Speaker Meira Kumar announced that the money bills would be passed without discussion,as decided by leaders of parties at a meeting of the Business Advisory Committee yesterday.
Maintaining that it had earlier been decided that discussion on the Budget would be taken up on April 23,she said,”however,under the prevailing circumstances as there is very limited time for completion of the financial business,as was decided at the BAC yesterday,the Finance Bill,Appropriations Bills,Demand for Grants and the Rail Budget may be passed without discussion.”
This led to objections by leaders of several parties with senior Trinamool Congress leader Sougata Roy raising a point of order saying the rules did not permit passage of money bills without any discussion.
Amid protests,Kumar then allowed Leader of Opposition Sushma Swaraj to speak. Her speech was followed by a walkout by BJP and Shiv Sena members.
Those from other parties,including JD(U),Left parties,AIADMK,DMK,BJD,TDP and Trinamool Congress also walked out separately,after their leaders had their say.
Lambasting the government for scams,Swaraj said each new scandal broke the past record and justified the week-long protests by BJP and other parties,saying as a responsible opposition it was their job to expose the “most corrupt government since independence”.
“This government wants that we don’t raise these issues. They don’t just commit scams but also engage in various acts to protect the Prime Minister and the Law Minister,” she said,with Congress members shouting back at her.
“The government is criticising our protests in Parliament. The Prime Minister says the Opposition’s attitude is making us a laughing stock on the global arena. The media says this House has witnessed the highest number of disruptions. But the government itself is solely responsible for this situation,” Swaraj said.
Swaraj blamed the government for stalling the PAC report on 2G scam by creating ruckus,preparing a draft JPC report on the issue which went “completely against the facts” and the Law Minister “changing the CBI report on the coal scam in his office”.
“And now they claim that the Law Minister was only correcting grammatical mistakes,” she said.
Terming the UPA government as “the most corrupt since Independence”,the BJP leader a series of scams have surfaced since it took over and “each new scam breaks the past record.”
While the Commonwealth Games scam had caused a loss of Rs 70,000 crore,the 2G spectrum scam led to a Rs 1.76 lakh crore loss and the coal scam resulted in the “loot” of Rs 1.86 lakh crore. “And they want to stop us from speaking out,” she said.
Maintaining that a responsible opposition acted as a “watchdog”,Swaraj asked,”Are we stopping the session for our personal interests or for quota permit for our family members?
Even the Supreme Court has said this government has broken the trust and shaken the foundations.
“Yesterday you called us for a meeting and said there will be financial crisis if the money bills are not passed. But we cannot be a party to their passage and neither can we obstruct their passage. So we will stage a walkout,” she said.
Swaraj made it clear that only the four issues agreed at the BAC meeting yesterday — Finance Bill,Appropriations Bills,Demand for Grants and the Rail Budget — should be taken up. “No other business,” she said.
She made it clear that after today’s Supreme Court observations on CBI affidavit on coal blocks allocation scam,they “will not co-operate with the government in any manner”.
To this,Parliamentary Affairs Minister Kamal Nath said the government has nothing to hide and was ready to discuss issues.
Nath said he was distressed to hear Opposition accusing the government of not allowing Parliament to run.