New Delhi: The Lok Sabha Friday passed the Finance Bill, 2014 by a voice vote. The bill, which is primarily the legislative proposals of the national budget for this fiscal, notably on taxes, will now go to the Rajya Sabha for approval.
The bill was passed after Finance Minister Arun Jaitley gave his reply to the debate on the budget, assuring the house that the measures he has outlined will create more jobs, generate economic activity and achieve higher growth, without burdening the people.
"Our's is not a high-tax government," the finance minister said. "A high tax government cannot promote business activity, since it will make domestic products non-competitive. High taxes also drive consumers away. Consumers buy products, they don't buy taxes."
He also assured the house that his government would not resort to indiscriminate levy of taxes with retrospective effect, and said such actions only create additional liabilities on businesses and send wrong signals to investors.
"We want to revive investor sentiment which had been disturbed."
The national Budget for 2014-15, which included the Finance Bill, was presented in the lower house of parliament July 10. Minister of State for Parliamentary Affairs Prakash Javadekar expects the Rajya Sabha to pass it by July 28.
During his reply Friday, the finance minister said the government under Prime Minister Narendra Modi was also moving fast on bringing back the ill-gotten money stashed away by Indians in tax havens abroad.
"The country will not have to wait for long for bringing back black money."
The finance minister also said that he will now try to implement the pan-India Goods and Services Tax regime within the current financial year and that two rounds of discussions had already taken place with the state governments, whose consent is essential.
"I have not gone into the details of it yet due to the budget exercise. But I now intend to spend some time on it. The government then will take a final view as to what to do," Jaitley said.
The finance minister again sought to assure the investing community that the government will not levy retrospective tax indiscriminately -- like the one on capital gains that was approved in 2012 with effect from 2007.
"Retrospective taxation sends a very negative signal and it has not helped our economy itself. Therefore, one of my jobs was to find solutions to this problem," the minister said.
"Of course every parliament has a sovereign right -- a sovereign right to legislate and a sovereign right to legislate retrospectively. The British parliament imposed several taxes, which are retrospective," he said.
"But as a policy this government will not use that right to create new liabilities and that is an assurance we want to give to the investors within the country and investors outside, so that we are able to assure people of our stable tax regime."