Now that the enabling legislation for GST is in place (assuming it is passed by Lok Sabha as well), the actual Bills (on creating the central GST, or CGST, and inter-state GST, or IGST) will follow. On Wednesday, all Opposition parties in Rajya Sabha were insistent that these Bills not be brought in as Money Bills — an assurance that Finance Minister Arun Jaitley, however, declined to give.
So, what is a Money Bill, and how does it differ from a Financial Bill — which the Opposition wants the coming Bills to be? Why is this important for the Congress and other Opposition parties? Why did they not demand this in the case of the enabling Constitution Amendment Bill that was passed by Rajya Sabha on Wednesday?
Money Bill and Financial Bill
Under Article 110 (1) of the Constitution, a Bill is deemed to be a Money Bill if it contains only provisions on all or any of the following:
(a) imposition, abolition, remission, alteration or regulation of any tax;
(b) regulation of borrowing by the government;
(c) custody of the Consolidated Fund or Contingency Fund of India, and payments into or withdrawals from these Funds;
(d) appropriation of moneys out of the Consolidated Fund of India;
(e) declaring of any expenditure to be expenditure charged on the Consolidated Fund of India or the increasing of the amount of any such expenditure;
(f) receipt of money on account of the Consolidated Fund of India or the public account of India or the custody or issue of such money or the audit of the accounts of the Union or of a State; or
(g) any matter incidental to any of the matters specified in (a) to (f).
In a general sense, any Bill that relates to revenue or expenditure is a Financial Bill. A Money Bill is a specific kind of Financial Bill, defined very precisely: it must deal only with matters specified in Article 110 (1) (a) to (g).
A Money Bill is certified by the Speaker as such — only those Financial Bills that carry the Speaker’s certification are Money Bills. Financial Bills that are not certified by the Speaker are of two kinds: Bills that contain any of the matters specified in Article 110, but do not contain only those matters [Article 117 (1)]; and ordinary Bills that contain provisions involving expenditure from the Consolidated Fund [Article 117 (3)].
The Congress’s interest
This flows from the procedure of introduction and passage of a Money Bill. Under Article 109 (1), such a Bill can be introduced only in Lok Sabha. Once passed by Lok Sabha, it goes to Rajya Sabha — along with the Speaker’s certificate that it is a Money Bill — for its recommendations. However, Rajya Sabha can neither reject nor amend it, and must return it within 14 days, after which Lok Sabha may accept or reject all or any of its recommendations. In either case, the Bill is deemed to have been passed by both Houses. Under Article 109 (5), if Rajya Sabha fails to return the Bill to Lok Sabha within 14 days, it is deemed to have been passed anyway.
The procedure of passage of Money Bills gives greater powers to Lok Sabha than Rajya Sabha. In the current situation, the Congress, which has majority in Rajya Sabha, would like to deal with a Bill that is not a Money Bill. This is because non-Money Bills cannot become law unless agreed to by both Houses, and in case of a deadlock (if, for example, Rajya Sabha continues to block legislation indefinitely), the way out is a joint sitting of both Houses (Article 108). This question does not arise in the case of a Money Bill, since it does not go to a joint sitting, and Lok Sabha can override the wish of Rajya Sabha.
As was evident in the House on Wednesday, the Opposition would not like to let any opportunity to armtwist the government pass. The government would not want to precipitate a crisis right way — but its silence to the Congress’s demand suggested it has no plans to oblige the Opposition.
The Constitution Amendment
Both Houses have equal powers vis-à-vis a constitutional amendment. And the Constitution does not provide for a joint sitting of the two Houses for the purpose. Therefore, the government, which did not have the numbers in Rajya Sabha, had to build a consensus to get The 122nd Constitution Amendment Bill passed. The Bills to follow will be different.
Article 110 (3) lays down that “if any question arises whether a Bill is a Money Bill or not, the decision of the Speaker of the House of the People thereon shall be final”. While the Speaker’s decision on making the Aadhaar Bill a Money Bill is pending in the Supreme Court, the legal position on GST seems to be that Bills which contain provisions for the imposition and abolition of taxes, and for appropriation of moneys out of the Consolidated Fund, are Money Bills. So, obviously, these would have to be introduced only in the Lok Sabha.