CA A. N. Khurana

CA A.N.Khurana


For any law to become enforceable in India, a Bill is presented before the Parliament which comprises of Lok Sabha and Rajya Sabha for discussion and its passage by majority votes.

A Bill is presented in Parliament in three different modes such as Money Bill, Finance Bill or a Private Bill. We all know that the new GST Bills were also introduced as Money Bills in the Lok Sabha on 27th March 2017 by the Finance Minister Mr.Arun Jattely which were passed by Lok Sabha on 29th March 2017. Question arises as to:

What is Money Bill & What is Finance Bill ?

Which items are covered under Money Bill ?

Why a Bill is presented as Money Bill ?

WHAT is Money Bill and Finance Bill

On a general note, a Bill that relates to revenue or expenditure is a Finance Bill.

A ‘Money Bill’ is a specific kind of Financial Bill, defined very precisely in Article 110 of the Constitution.

All Money Bills are Financial Bills, but all Financial Bills may not be Money Bills.

Money Bill is a Bill which results in imposition, abolition, remission, alteration or regulation of any tax at union or state level but NOT at local level. Thus, Money Bill exist in Parliament and State legislature only. If a Finance Bill results in  imposition, abolition, remission, alteration or regulation at local level by a local body, it is not considered to be a Money Bill.

Question of whether a Financial Bill is Money Bill or not, is decided by the Speaker of Lok Sabha. Such Bill needs to be endorsed by the Speaker as Money Bill, when passed by Lok Sabha and sent to Rajya Sabha for its consideration.

Procedure for Passing of the Money Bill

The Money Bills have special features which make the procedure of their passage in Parliament distinct. These special features are:

a) A Money Bill can be introduced / originated only in Lok Sabha;

b) A Money Bill can be introduced only on prior recommendations of the President ;

c) A Money Bill can be a Government Bill only;

d) No Private Bill can be a Money Bill;

e) Once a Money Bill is passed in Lok Sabha, it is transmitted to Rajya Sabha for its consideration. But Rajya Sabha has limited powers in this context. It can neither reject nor amend the Money Bill. It can make only recommendations and has to return the Bill with or without recommendations to Lok Sabha in 14 days, else it will be deemed to have been passed;

f) The Lok Sabha may or may not accept the recommendations of Rajya Sabha. Whether or not accepted those recommendations, the returned bill is considered passed in both the Houses. If Rajya Sabha does not even return the Bill in 14 days, it is considered passed in both Houses under Article 109(5). President can withhold assent to Money Bill but can not return it for reconsideration of the Lok Sabha; and

g) There is no question of joint sitting in case of Money Bills because opinion of Rajya Sabha is immaterial in this case. Example of a Money Bill is “Finance Bill” which is introduced with the annual Budget in India. Usually such Bill has provisions related to Article 110 (1)(a) {imposition, abolition, remission, alteration or regulation of any tax} and is certified as a Money Bill by the Speaker and Rajya Sabha has no power to change its fate.

A Private Bill on the other hand is not a Govt., Bill and it can be presented by any member of the Parliament which is in the public interest.

WHICH Items are covered under Money Bill

Under Article 110(1) of the Constitution, a Bill is deemed to be a Money Bill if it contains provisions on all or any of the following items:

(a) imposition, abolition, remission, alteration or regulation of any tax;

(b) regulation of borrowing by the Government;

(c) custody of the Consolidated Fund or Contingency Fund of India, and payments into or withdrawals from these Funds;

(d) appropriation of moneys out of the Consolidated Fund of India;

(e) declaring of any expenditure to be expenditure charged on the Consolidated Fund of India or the increasing of the amount of any such expenditure;

(f) receipt of money on account of the Consolidated Fund of India or the public account of India or the custody or issue of such money or the audit of the accounts of the Union or of a State; or

(g) any matter incidental to any of the matters specified in (a) to (f).

WHY a Bill is presented as Money Bill

In the case of a Money Bill, Lok Sabha enjoys certain prerogatives which results in expedious passage of Bill, if presented as Money Bill, especially when the Govt. in power enjoys full majority in the Lok Sabha.

In the current scenerio, the Congress, which has majority in Rajya Sabha, would like to deal with a Bill that is not a Money Bill, to have its say.

In fact the former Finance Minister Mr.Chidambram had sought the assurance from the Govt., that the Final GST law should be presented as Finance Bill and not as Money Bill, ostensibly to make it hard for the present day Govt. to get the GST Bill passed at its own terms which enjoys majority only in Lok Sabha, but the Govt., obivously did not oblige him.

Non Money Bills cannot become law unless agreed to by both Houses and in case of a deadlock (if, for example, Rajya Sabha continues to block a legislation indefinitely), the way out is a joint sitting of both Houses (Article 108). The question of joint sitting does not arise in the case of a Money Bill and Lok Sabha can override the wish of Rajya Sabha. Hence, if a Bill is presented as Money Bill, the present day Govt., is more comfortable than if a Bill is presented as a Financial Bill, however after the recent favourable results in states elections, the Govt., is likely to gain more numbers in Rajya Sabha as well, in the time to come and steadily it reduces its dependence on opposition parties for passage of any Bill.

Some Related Posts:-

Author Bio

Qualification: CA in Practice
Company: A.N.Khurana & Co.
Location: NEW DELHI, New Delhi, IN
Member Since: 22 Apr 2017 | Total Posts: 1

Join Taxguru’s Network for Latest updates on Income Tax, GST, Company Law, Corporate Laws and other related subjects.

Join us on Whatsapp

taxguru on whatsapp GROUP LINK

Join us on Telegram

taxguru on telegram GROUP LINK

Download our App


More Under Finance


Leave a Comment

Your email address will not be published. Required fields are marked *

Search Posts by Date

February 2024