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The Finance Bill, 2017 is being discussed in Lok Sabha today. Generally, the Finance Bill is passed as a Money Bill since it gives effect to tax changes proposed in the Union Budget. A Money Bill is defined in Article 110 of the Constitution as one which only contains provisions related to taxation, borrowings by the government, or expenditure from Consolidated Fund of India. A Money Bill only needs the approval of Lok Sabha, and is sent to Rajya Sabha for its recommendations. It is deemed to be passed by Rajya Sabha if it does not pass the Bill within 14 calendar days.
In addition to tax changes, the Finance Bill, 2017 proposes to amend several laws such the Securities Exchange Board of India Act, 1992 and the Payment and Settlements Act, 2007 to make structural changes such as creating a payments regulator and changing the composition of the Securities Appellate Tribunal. This week, some amendments to the Finance Bill were circulated. We discuss the provisions of the Bill, and the proposed amendments.
Certain Tribunals to be replaced
Amendments to the Finance Bill seek to replace certain Tribunals and transfer their functions to existing Tribunals. The rationale behind replacing these Tribunals is unclear. For example, the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) will replace the Airports Economic Regulatory Authority Appellate Tribunal. It is unclear if TDSAT, which primarily deals with issues related to telecom disputes, will have the expertise to adjudicate matters related to the pricing of airport services. Similarly, it is unclear if the National Company Law Appellate Tribunal, which will replace the Competition Appellate Tribunal, will have the expertise to deal with matters related to anti-competitive practices.
Terms of service of Tribunal members to be determined by central government
The amendments propose that the central government may make rules to provide for the terms of service including appointments, term of office, salaries and allowances, and removal for Chairpersons and other members of Tribunals, Appellate Tribunals and other authorities. The amendments also cap the age of retirement for Chairpersons and Vice-Chairpersons. Currently, these terms are specified in the laws establishing these Tribunals.
One may argue that allowing the government to determine the appointment, reappointment and removal of members could affect the independent functioning of the Tribunals. There could be conflict of interest if the government were to be a litigant before a Tribunal as well as determine the appointment of its members and presiding officers.
The Supreme Court in 2014, while examining a case related to the National Tax Tribunal, had held that Appellate Tribunals have similar powers and functions as that of High Courts, and hence matters related to their members’ appointment and reappointment must be free from executive involvement.[i] The list of Tribunals under this amendment includes several Tribunals before which the central government could be a party to disputes, such as those related to income tax, railways, administrative matters, and the armed forces Tribunal.
Note that a Bill to establish uniform conditions of service for the chairpersons and members of some Tribunals has been pending in Parliament since 2014.
Inclusion of technical members in the Securities Appellate Tribunal
The composition of the Securities Appellate Tribunal established under the SEBI Act is being changed by the Finance Bill. Currently, the Tribunal consists of a Presiding Officer and two other members appointed by the central government. This composition is to be changed to: a Presiding Officer, and a number of judicial and technical members, as notified by the central government.
Creation of a Payments Regulatory Board
Recently, the Ratan Watal Committee under the Finance Ministry had recommended creating a statutory Payments Regulatory Board to oversee the payments systems in light of increase in digital payments. The Finance Bill, 2017 seeks to give effect to this recommendation by creating a Payments Regulatory Board chaired by the RBI Governor and including members nominated by the central government. This Board will replace the existing Board for Regulation and Supervision of Payment and Settlement Systems.
Political funding
The Finance Bill, 2017 proposes to make changes related to how donations may be made to political parties, and maintaining the anonymity of donors.
Currently, for donations below Rs 20,000, details of donors do not have to be disclosed by political parties. Further, there are no restrictions on the amount of cash donations that may be received by political parties from a person. The Finance Bill has proposed to set this limit at Rs 2,000. The Bill also introduces a new mode of donating to political parties, i.e. through electoral bonds. These bonds will be issued by banks, which may be bought through cheque or electronic means. The only difference between cheque payment (above Rs 20,000) and electoral bonds may be that the identity of the donor will be anonymous in the case of electoral bonds.
Regarding donations by companies to political parties, the proposed amendments to the Finance Bill remove the: (i) existing limit of contributions that a company may make to political parties which currently is 7.5% of net profit of the last three financial years, (ii) requirement of a company to disclose the name of the parties to which a contribution has been made. In addition, the Bill also proposes that contributions to parties will have to be made only through a cheque, bank draft, electronic means, or any other instrument notified by the central government.
Aadhaar mandatory for PAN and Income Tax
Amendments to the Finance Bill, 2017 make it mandatory for every person to quote their Aadhaar number after July 1, 2017 when: (i) applying for a Permanent Account Number (PAN), or (ii) filing their Income Tax returns. Persons who do not have an Aadhaar will be required to quote their Aadhaar enrolment number indicating that an application to obtain Aadhaar has been filed.
Every person holding a PAN on July 1, 2017 will be required to provide the authorities with his Aadhaar number by a date and in a manner notified by the central government. Failure to provide this number would result in the PAN being invalidated.
The Finance Bill, 2017 is making structural changes to some laws. Parliamentary committees allow for a forum for detailed scrutiny, deliberations and public consultation on proposed laws. The opportunity to build rigour into the law-making process is lost if such legislative changes are not examined by committees
[i] Madras Bar Association vs. Union of India, Transfer Case No. 150 of 2006, Supreme Court of India, September 25, 2014 (para 89).
With the spread of COVID-19, along with the central government, the state governments have also announced several policy decisions to contain and prevent the spread of the virus. In this blog post, we summarise some of the key measures taken by the Uttarakhand Government in this regard as of April 16, 2020.
As of April 15, 2020, 2,413 samples have been sent for testing in Uttarakhand. Of these, 37 have been found COVID-19 positive and the results of 354 samples are awaited. Of the 37 confirmed cases, 9 patients have been cured/discharged.[1]
Movement Restrictions
To contain the spread of COVID-19 in the state, the Government of Uttarakhand took the following measures for restricting the movement of people in the state.
On March 20, the Department of Health restricted the entry of all tourists (domestic and foreign) into the state.[2] The Department further issued orders for the closure of all educational institutions, gyms, swimming pools, museums, cultural and social centres, and theatres until March 31.[3]
On March 22, the state announced a complete lockdown till March 31.[4] Restrictions during the lockdown included: (i) prohibiting the gathering of more than five people at any public place, (ii) suspending all public transport including taxis and auto-rickshaws, and (iii) closure of all shops, commercial establishments, offices and factories. Establishments providing essential goods and services were excluded from the lockdown restrictions. These include: police, medical and health, print and electronic media, food, groceries, and their transportation, among others.4
On March 25, the central government announced on a 21-day country-wide lockdown till April 14.[5] On April 14, the lockdown was further extended till May 3, 2020.[6]
On April 15, the Ministry of Home Affairs issued guidelines on the measures to be taken by state governments until May 3.[7] As per these guidelines, select activities will be permitted from April 20 onwards, to mitigate hardship to the public due. These activities include health services, agriculture and related activities, certain financial sector activities, operation of Anganwadis, MNREGA works, and cargo movement, among others. Further, subject to certain conditions, commercial and private establishments, industrial establishments, government offices, and construction activities will also be permitted.7
Health Measures
Uttarakhand Epidemic Disease COVID-19 Regulations 2020
On March 15, 2020, the government notified the Uttarakhand Epidemic Disease COVID-19 Regulations, 2020 for the containment of COVID-19 in the state.[8] Key features of the regulations include the following:
All hospitals (government and private) must have dedicated flu corners for the screening of suspected COVID-19 cases.
The spread of any misinformation must be avoided. No person or organisation can use any print or electronic media for information regarding COVID-19 without prior permission of the state health department.
Guidelines for citizens, healthcare facilities and government departments
The state issued several guidelines and advisories on various subjects related to the containment of the virus.[9] These guidelines have been targeted towards citizens, healthcare facilities, as well as government departments. Some of these guidelines are given below:
For citizens: These include guidelines on the use of masks by the public, guidelines for home quarantine, and advisory to not consume tobacco to prevent the virus.8
For healthcare facilities: Guidelines for health care facilities include: sample collection, packaging and transport guidelines, infection prevention control for suspected cases, clinical management of COVID – 19, and discharge policy for COVID-19 patients, among others.8
For government: Guidelines for government departments include: guidelines for cluster containment, strategy, advisory on the use of hydroxychloroquine for high-risk population, and guidelines for quarantine facilities for COVID-19.8
Administrative Measures
On March 21, the state government cancelled all leaves for employees from the Department of Medical, Health and Family Welfare and ordered all the employees on leave to report back.[10] Further, on March 19, the state government announced that the administrative control of all properties and accommodations under the tourism department and other government enterprises will be given to the respective District Magistrates, temporarily.[11]
Education
On March 21, the state government postponed the correction of all state board examination booklets, which were to be corrected from April 1 to April 15, 2020.[12] The government also postponed exams for the Forest Research Institute, which were supposed to be conducted in March.[13]
For more information on the spread of COVID-19 and the central and state government response to the pandemic, please see here.
[1] Dehradun Health Bulletin on Corona Virus Disease (COVID-19), Status as on April 15, 2020 Time: 05:30 PM, Uttarakhand State Control Room COVID -19, Health and Family Welfare, Uttarakhand, http://health.uk.gov.in/files/Corrected-15-04-2020-Health-Bulletin.pdf.
[2] Order No. 48/PS-Secy(H)/2020, Department of Medical, Health and Family Welfare, March 20, 2020, https://prsindia.org/files/covid19/notifications/427.UK_Advisory_for_Tourists_20_Mar.pdf.
[3] Advisory on social distancing measure in view of spread of COVID-19 disease, Government of Uttarakhand, https://prsindia.org/files/covid19/notifications/1835.UK_Social_Distancing_Advisory_Uttarakhand.pdf.
[4] Order No. UKHFWS/PS-MDNHM/2019-20/217, Department of Medical, Health and Family Welfare and Medical Education, March 22, 2020, https://prsindia.org/files/covid19/notifications/432.UK_Order_Lockdown_Mar_22.pdf.
[5] Order No. 1-29/2020-PP, National Disaster Management Authority, March 24, 2020, https://mha.gov.in/sites/default/files/ndma%20order%20copy.pdf.
[6] “PM addresses the nation for 4th time in 4 Weeks in India’s fight against COVID-19” Press Release, Prime Minister’s office, April 14, 2020, https://pib.gov.in/PressReleseDetail.aspx?PRID=1614255.
[7] Order No.40-3/2020-DM-I(A), Ministry of Home Affairs, April 15, 2020, https://www.mha.gov.in/sites/default/files/MHA%20order%20dt%2015.04.2020%2C%20with%20Revised%20Consolidated%20Guidelines_compressed%20%283%29.pdf.
[8] Notification No. 370/XXVIII(1)/2020-01(06)/2020, Department of Medical Health and Medical Education, March 15, 2020, http://health.uk.gov.in/files/The_Uttarakhand__Epidemic__Disease__COVID-19_Regulation_2020.pdf.
[9] Website of Department of Medical, Health and Family Welfare, Corona (COVID19) updates, Government of Uttarakhand, last visited on March 16, http://health.uk.gov.in/pages/display/140-novel-corona-virus-guidelines-and-advisory-.
[10] Order No. 1P/Ra0pu0/miscellaneous/1/2018, Department of Medical, Health and Family Welfare, March 19, 2020, https://prsindia.org/files/covid19/notifications/430.UK_DG-Order-Cancellalation_of_Leave_Health_Workers_21_Mar.pdf.
[11] Order No. 42/Secy Health/2020, Department of Medical, Health and Family Welfare, March 19, 2020, https://prsindia.org/files/covid19/notifications/1826.UK_Advisory_for_KMVN_and_GMVN_Mar19.pdf
[12] Advisory No. 123/XXIV-B-5/2020/03(01)/2020, Secretary Uttarakhand Government, March 21, 2020, https://prsindia.org/files/covid19/notifications/429.UK_Advisory_for_Board_Student_of_Uttarakhand_21_Mar.pdf.
[13] Advisory No. 122/XXIV-B-5/2020/03(01)/2020, Secretary Uttarakhand Government, March 21, 2020, https://prsindia.org/files/covid19/notifications/1828.UK_Advisory_for_Board_Student_of_FRI_Uttarakhand_Mar21.pdf.