Rajya Sabha adjourned for the day and scheduled business could not be taken up due to disruptions.
Lok Sabha passed the CGST (Extension to Jammu and Kashmir) and IGST (Extension to Jammu and Kashmir) Bills. These bills replace ordinances which are in force. Some members participating in the debate were critical of the government for taking the ordinance route for legislation. During the discussion, members raised their concerns about the fiscal autonomy of Jammu and Kashmir, and the implications of GST on the state’s special status (Article 370) which has led to protests in some parts of the state. Other GST related issues such as increase in litigation related to the multiplicity of tax rates and classification of goods, powers of the GST Council, protests by trade groups, increase in prices after July 1, among other things were also raised.
Several MPs also requested the Finance Minister for levying 0% tax rate on sanitary napkins and medical equipment related to disabled. Responding to this, the Minister explained that levying 0% tax on these products will result in a higher final price of these goods. He explained that input tax credit will not be available for the taxes paid on inputs of these goods, resulting in consumers paying the entire tax amount embedded in the final price of the good which could lead to higher prices.
The Banking Regulation (Amendment) Bill was also taken up in Lok Sabha. The Bill allows the Reserve Bank of India (RBI) to issue directions to banks for initiating recovery proceedings against loan defaulters. Members taking part in the discussion pointed out that the Centre as a majority shareholder in public sector banks could have decided to initiate proceedings earlier. According to the RBI, loans extended by public sector banks account for 88% of the NPAs in the country. Further, as the banking regulator, the RBI is responsible for maintaining financial stability, while banks have the flexibility to make business decisions. The appropriateness of RBI directing banks on defaults – which is a business decision was also questioned by some members.