Says unprecedented for a Bill to have two different dates of commencement

MB Subba

The Goods and Services Tax (GST), arguably the government’s biggest reform initiative, has hit a hurdle, as the National Council (NC) is likely to vote for withdrawal of the Bill.

The good governance committee of the House yesterday cited issues regarding the legality of the commencement date and preparedness of the government for its inability to support the Bill.

The committee recommended withdrawal of the Bill, on which the House is scheduled to vote today.

Chairman of the committee, Lhatu, said that in the interest of saving the parliament from willfully violating Section 46B of the Public Finance Act and for providing enough time to the government to get ready for smooth transition to GST system, the committee proposed the House to recommend National Assembly to withdraw the adoption of the GST Bill 2020 until all necessary systems are put in place.

The National Assembly has proposed that Chapters 7, 8, 9 and 10 of the Bill would be implemented from July 1, 2021 and the rest of the Chapters from the day of its enactment.

“Firstly, it is unprecedented for a Bill to have two different dates of commencement. Secondly, as per Section 46B of the Public Finance (amendment) Act 2012, the imposition or increase of any tax or abolition, reduction or remission of any existing tax once passed as law by parliament shall be applied retrospectively from the date it was initially tabled in the National Assembly,” Lhatu said.

Any deviation from Section 46B of the Act, he said, would amount to willful violation of the prevailing law.

The committee chairman stated that the government had clearly indicated that necessary facilities required for implementation of the GST are yet to be established. The government, he said, had plans to buy time for the GST to be operational.

“If that is so, the need for the Bill to be passed immediately in this session is not found justifiable,” Lhatu said,

Citing Section 46C of the Public Finance Act, he stated that “a Bill shall not be deemed to be a money Bill or Financial Bill by reason only that it provides for principles and procedures that relates to taxation or spending or for the imposition or alteration of any fine or other pecuniary penalty or for the payment or demand of any fee or charge for any service rendered”.

He said that a digital application software system, which was prerequisite for enforcement of GST rates, would take time. “It may be safe for parliament not to rush the Bill,” he said.

Money Bills are the prerogative of the National Assembly.