NEW DELHI: The government on Tuesday proposed to reduce the cap on cash transactions to Rs 2 lakh, down from Rs 3 lakh as announced in the Union Budget.
A penalty of equal amount would be levied in case of violation of the provision, a tweet by revenue secretary Hasmukh Adhia said after the amendment was moved.
Finance Minister Arun Jaitley had in his Budget speech announced that on the recommendation of the Special Investigation Team (SIT) on Black Money, the government had decided not to allow cash transactions above Rs 3 lakh.
Today's proposal was one of the 40 amendments to the Finance Bill moved by the government.
As the Finance Bill was taken up for consideration in the Lok Sabha, opposition parties like TMC, BJD and RSP protested against the introduction of the amendments to 40 Acts, saying it was being done in the form of "back-door entry".
The amendments to the laws like Companies Act, Employees Provident Fund, Smuggling and Foreign Exchange Act, TRAI Act and Information Technology Act, have been moved with an aim of making the functioning of tribunals more efficient by merging the smaller ones and reducing their numbers from 40 to 12.
The objections by the opposition parties were overruled by Speaker Sumitra Mahajan who ruled that the 'incidental provisions' involved in the amendments constitute a 'Money Bill' and therefore can be considered as part of the Finance Bill.
Jaitley, while defending the move to make amendments, invoked first Lok Sabha Speaker G V Mavalankar.
He said if a substantial portion of a bill deals with imposition or abolition of tax, then even if it has other incidental provisions, it still can be introduced as a Money Bill.
"You cannot have a bill which says government will spend Rs 100,000 crore without detailing how it would be spent. You cannot have a bill where you say there will be 5 per cent without specifying what will be the deduction, what will be the power of assessing officer, appeal provision... No tax can be imposed without reference to courts or tribunals.. These are incidental provisions...," Jaitley said.
The Minister said opposition's objection is borne out the language in Article 110(1) and ever since the inception, the House has been debating on the word 'only' used in the Article.