Government Proposes Capping of Cash Transactions at Rs 2 lakh
On Tuesday, the government moved a fresh proposal to restrict cash transactions at Rs 2 lakh instead of Rs 3 lakh as provided in the Budget.
After taking up the Finance Bill for consideration in the Lok Sabha, there was protest from opposition parties like RSP, BJD and TMC against the introduction of the amendments to 40 acts, saying it was being done in the form of “back-door entry”.
The amendments to the laws like Companies Act, Employees Provident Fund, Smuggling and Foreign Exchange Act, TRAI Act and Information Technology Act, have been moved with an aim of making the functioning of tribunals more efficient by merging the smaller ones and reducing their numbers from 40 to 12.
The objections by the opposition parties were overruled by Speaker Sumitra Mahajan who ruled that the ‘incidental provisions’ involved in the amendments constitute a ‘Money Bill’ and therefore can be considered as part of the FinanceBill.
Among the amendments made to the Finance Bill was a provision to cap cash transaction at Rs 2 lakh. Earlier, while presenting the Budget on February 1, Finance Minister Arun Jaitley had proposed the cap to be Rs 3 lakh with effect from April 1.
A penalty of equal amount would be levied in case of violation of the provision, according to a tweet by Revenue Secretary Hasmukh Adhia after the amendment was moved.
Jaitley, while defending the move to make amendments, invoked first Lok Sabha Speaker G V Mavalankar. He said if a substantial portion of a bill deals with imposition or abolition of tax, then even if it has other incidental provisions, it still can be introduced as a Money Bill.
“You cannot have a bill which says government will spend Rs 100,000 crore without detailing how it would be spent. You cannot have a bill where you say there will be 5 percent without specifying what will be the deduction, what will be the power of assessing officer, appeal provision… No tax can be imposed without reference to courts or tribunals.. These are incidental provisions…,” Jaitley said.
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