The Constitutional Amendment Bills
Dr. Akhedan Charan
Additional Commissioner of State Tax
The Constitution of India granted the authority to levy taxes to both the central government and the state governments, as specified in the lists outlined in the Constitution. In order to modify the indirect tax system, the government was required to make changes to the Constitution and obtain ratification from a minimum of 50 percent of the state legislatures. The procedure for amending the Constitution of India is outlined in Article 368 of Part XX of the Constitution. Amending the Constitution refers to the process of modifying the fundamental law of the nation.
As per Article 368, the Constitution can be modified by Parliament through the inclusion, alteration, or removal of any provision. The initiation of a constitutional amendment can only occur through the presentation of a bill with that specific purpose in either house of the parliament. The bill must be approved in both Houses by a majority of the total number of members present and voting. According to Article 368(2e), if the amendment is about the states, it must be passed by the state legislatures of at least half of the states before it is brought to the President of India for approval.
Under the UPA I administration, the government made the decision to replace the current tax system with a new Goods and Services Tax (GST). The UPA II government proposed the GST CAB, however, it failed to secure approval in the Parliament. In 2014, the NDA II administration made the decision to reintroduce the bill with some modifications, which subsequently transformed into an act. This chapter will examine the GST Constitutional Amendment Bills (CABs) introduced by the UPA government and the NDA government.
The Constitution (115th Amendment) Bill of 2011
The UPA II administration presented the CAB 2011 in the Lower House on 22 March 2011.1 The GST Bill, 2011, [1] was the final version of the central government’s fourth draft, resulting from a series of debates including the centre, the states, and the EC. The administration intended to implement the new tax starting on 1 April 2010. However, Pranab Mukherjee postponed the implementation of GST to 1 April 2011.
The CAB 2011 comprised a total of 19 sections. The bill aims to modify the Constitution by introducing additional Articles 246A, 269A, 279A, and 279B. These articles are intended to establish specific regulations for the Goods and Services Tax (GST), including the imposition and collection of GST for inter-state trade or commerce, as well as the creation of the GST Council. The GST Bill seeks to modify Articles 248, 249, 250, 268, 270, 271, 286, 366, and 368, as well as Entry 52, 54, and 84 of the Constitution. The measure also aimed to modify the Sixth and Seventh Schedules. The bill included a provision to remove Article 268A, Clause 29A of Article 366, Entry 92 and 92C of List 1, and Entry 55 of List II in the Seventh Schedule. [2]
In accordance with the usual protocol for significant measures, the Speaker of the Lok Sabha submitted the bill to the Standing Committee on Finance on 29 March 2011 for thorough study and the submission of a report. Yashwant Sinha, the former Finance Minister, led the committee. The committee diligently commenced the assessment of the bill and was eager to present its findings to Parliament no later than the monsoon session of Parliament in 2012.
The committee has faced criticism from certain sources for allegedly causing a delay in submitting its findings, thereby impeding the UPA government’s ability to finalize the bill and implement the Goods and Services Tax (GST). Firstly, the completion of the committee’s report was arduous, and secondly, the government itself was primarily responsible for the delay, not the committee. The matter has been thoroughly addressed in the committee’s report. The committee’s report has instructed the Ministry of Finance to provide a response to the questions highlighted by the committee members.
However, the ministry just provided its preliminary response to these inquiries in August 2012, which coincided with the committee’s deadline for the submission of its final report. The committee once again asked the ministry to provide its final opinions on the inquiries and the structure of GST and CST compensation. The government notified the committee that it would only be able to convey its opinions by January 2013. In March 2013, the ministry reiterated to the committee that the government had formed a committee to conduct a detailed examination of the necessary changes to be made in the GST Constitution Amendment Bill.
The ministry further conveyed to the committee that a final decision regarding the amendments to be incorporated in the Bill will be made only after taking into account the observations and recommendations of the Standing Committee on Finance.[3] The committee was taken aback by this reaction, considering the government was eager to reintroduce the bill in Parliament. In any case, the standing committee presented its report on August 7, 2013, accompanied with a dissenting letter from the member of the Samajwadi Party. However, the government has not yet resolved the lingering issue of CAB 2011. Given that it was the final year of the UPA II government, if the bill had not been passed, it would have become invalid. Ultimately, when the President disbanded the fifteenth Lok Sabha, as anticipated, the measure became invalid. The aforementioned scenario leads to the conclusion that the UPA II administration was not enthusiastic about passing the CAB during its mandate and intentionally postponed the implementation of GST for a minimum of two years.
The committee obtained the Speaker of Lok Sabha’s special authorization to interrogate the representatives of certain state administrations. The government officials from Gujarat, including Minister Saurabh Patel, appeared before the committee. His compelling argument against GST during the committee meeting led to the majority of members being firmly persuaded that the entire concept was flawed and should be completely rejected. Vijay Kelkar was consequently summoned to reappear before the committee in order to obtain an accurate understanding of the entire matter. He successfully persuaded the committee members once again to endorse the favor of GST. The committee ultimately presented its report endorsing the CAB, accompanied with other valuable recommendations to enhance the measure.
The Constitution (122nd Amendment) Bill of 2014
The National Democratic Alliance (NDA) II assumed power in the year 2014. The government proactively introduced a new GST Bill. Given the government’s majority in the Lok Sabha, it was anticipated that the measure would be easily approved by the Lower House. The task was to obtain the endorsement of the Upper House, despite the government’s lack of majority support. The Citizenship Amendment Bill (CAB) of 2014 was presented in the Lok Sabha on 19 December 2014. The CAB 2014 was passed in the Lower House on 6 May 2015, as anticipated.
Following that, the CAB 2014 was presented in the Upper House on 12 May 2015. However, because of the opposition from the Congress-led opposition, the measure was sent to a Select Committee of Rajya Sabha for scrutiny and report. Bhupendra Yadav, a member of the BJP, served as the chairman of the committee. The committee presented its findings to the Rajya Sabha on 22 July 2015, accompanied by three dissenting comments.
The CAB 2014 comprised a total of 21 sections. The bill aimed to modify the Constitution by adding new Articles-246A, 269A, and 279A, with the purpose of establishing specific regulations for GST,[4] implementing and collecting GST for inter-state trade or commerce, and establishing the GST Council, respectively.
The CAB 2014 also suggested changes to Articles 248, 249, 250, 268, 269, 270, 271, 286, 366, and 368, as well as Entry 54, 62, and 84 of the Constitution. The measure also purported to change the Sixth and the Seventh Schedules as well. The bill included a proposal to remove Article 268A, Clause 29A of Article 366, Entry 92 and 92C of List 1, and Entry 52 and 55 of List II in the Seventh Schedule.
Comparison between CAB 2011 and CAB 2014
The Central Acquisition Bill (CAB) of 2011 was presented in the Lok Sabha by the former Finance Minister, Pranab Mukherjee, on 22nd March 2011. The introduction of CAB 2014 was carried out by Finance Minister Arun Jaitley on 19 December 2014. Both bills aimed to implement a revised tax framework by amending the Constitution of India. CAB 2011 consisted of 19 sections. The CAB 2014 consisted of 21 sections.
The objective of the CAB (Constitutional Amendment Bill) of UPA II (United Progressive Alliance II) and CAB of NDA II (National Democratic Alliance II) was to grant concurrent authority to both the central government and state governments to enact legislation on the Goods and Services Tax (GST). Now, we will analyse and contrast the provisions of CAB 2011, the suggestions put out by the Standing Committee on Finance, and the modifications implemented by the NDA II administration in CAB 2014 (Table 11.1). Subsequently, the CAB 2014 was transformed into the Constitution (101th Amendment) Act, 2016
[1] The bill is identified as number 22/2011
[2] indirect tax reform in india, yashwant Sinha and vinay k. shrivastav
[3] GOI, Seventy Third Report, 64
[4] GOI,Report of the Select Committee,9