Parliament to take up black money, GST bills next week

FM Arun Jaitley said the government aims to curb unaccounted money and ensure all foreign transactions became transparent by 2017

After securing the nod of the Lok Sabha for the Finance Bill, 2015, the government is set to move two other important economic Bills — the Undisclosed Foreign Income and Assets Bill (popularly known as the black money Bill), and the constitutional amendment Bill for a goods and services tax (GST) — in Parliament next week.

At an event organised by the Enforcement Directorate here, Finance Minister Arun Jaitley said, “Next week, I intend to take up before Parliament the law with regard to taxation of undisclosed assets and incomes abroad.”

In March, the government had introduced the black money Bill, which provides for heavy penalties and imprisonment of up to 10 years for stashing unaccounted funds abroad. It will also provide a window to those with funds abroad to come clean by paying tax, interest and penalty.

Jaitley said the government aimed to curb unaccounted money and ensure all foreign transactions became transparent by 2017. He also advised companies not to take undue advantage of the liberalised environment in India.

“I think, for every assessee, every person in the commercial business, it is a judgement call that in a liberal economic environment of reasonable and lower taxation rates, ‘go straight’. Therefore, if you transact within the limits of law, it is much safer; if you breach it, gone are the days where offences would go undetected,” he said.

Jaitley emphasised the importance of the G20 initiatives of automatic exchange of information and the Foreign Account Tax Compliance Act with regard to making global transactions transparent.

“There are a large number of prosecutions filed in the past few months against offenders whose accounts were informed to the government of India. I understand the assessment of 100 of those cases has been completed and 121 prosecutions have been filed by the tax department against those caught with accounts abroad,” he said.

Enforcement Director Rajan Katoch said the agency had accorded priority to tackling cases involving unaccounted money, adding last financial year, it had attached assets worth about Rs 9,000 crore pertaining to hawala and money-laundering crimes. In 2014-15, the agency completed investigations in 1,918 cases, against 1,836 cases the previous year, even as it “resolved” 2,000 preliminary inquiries, he said at the same event.

Katoch added lack of adequate staff strength was the primary reason behind the backlog of cases with the Enforcement Directorate.

The government is hopeful of the passage of the constitutional amendment Bill for GST in the Lok Sabha next week. The Bill has to be passed with a two-thirds majority in each House of Parliament. Subsequently, at least half the states have to approve the Bill.

Various issues, however, continue to dog the Bill. These include a revenue-neutral rate and compensation to states. It is learnt a number of states have sought an increase in the number of years for compensation. The Centre, on its part, has agreed to compensate states for five years.

Besides, manufacturing states say as GST is a destination-based tax, it wouldn’t benefit them.

City-based National Institute of Public Finance and Policy (NIPFP) has been tasked with reworking the previously proposed revenue neutral rate of 27 per cent, as the figure, based on 2010 data, was said to be too high. NIPFP is expected to give a report on the GST rate by May 7-8, when an empowered committee on the issue is scheduled to meet in Thiruvananthapuram. The new rate would be based on 2014-15 data.

Speaking in Shillong on Friday, Union Transport Minister Nitin Gadkari said a Bill on inland waterways would also be table next week. “The Inland Waterways Bill will be tabled (in Parliament) on Tuesday,” he said.