Rajya Sabha witnessed friendly exchanges between Jaitley and Chidambaram as the finance minister and his predecessor spoke in the Rajya Sabha while the House discussed the historic Constitution Amendment Bill on GST.
Jaitley and Chidambaram, both noted lawyers, took digs at each other over the drafting of the bill and its provisions.
It started with Chidambaram saying the bill had been drafted in an “clumsy” manner.
“I think Chidambaram mentioned that the bill had a clumsy drafting because it says that some of the revenue collected will not be part of the consolidated fund of the Centre or the States and the argument was that every revenue has to go into the consolidated fund,” he said.
The Minister said that “clumsy drafting” is a “bit too extreme in expression”.
He further said: “I thought that probably the best draft person India ever had was B N Rao, who aided Babasaheb Bhim Rao Ambedkar. And the phrase which you call clumsy drafting is verbatim the same, if you picked up Article 268 (2) of the original constitution. This is Rao’s draft, which Dr Ambedkar as Chairman of the Drafting Committee forwarded.”
Quoting the Article, Jaitley said the proceeds in any such financial year of any such duty leviable within any state shall not form part of the Consolidated Fund of India, but shall be assigned to that state.
Similarly, the constitution has been amended and the same language has been included in Article 269 (2), he added.
“And the reason is … why do you not include a part of the revenue into the Consolidated Fund. In a GST system… you can’t have the same accessee being accessed simultaneously by the Centre and the States. Where the Centre collects revenue through the computer network, the state’s share is then credited to the state.
“Similarly, where state collects the revenue and some of that is Centre’s share, it is credited to the Centre. If that is deposited into the Consolidated Fund of Centre or State, then first we have to come to Parliament and give every state its share by passing the Appropriation Bill,” he added.
To avoid that situation, there is a provision that this will not be credited to the Consolidated Fund of the Centre or the State and therefore the apportionment will take place outside, he said.
To this Chidambaram said: “I certainly do not claim to be as wise and clever as late B N Rao. Finance Minister pointed out 2 provisions of the Constitution where the phrase ‘shall not form part of the Consolidated Fund of India’ is used. I don’t dispute that.
But is doesn’t stop there. But ‘shall not form part of the Consolidated Fund of India, but shall be assigned to that State”. Similarly Article 269 says ‘shall not form part of the Consolidated Fund of India, but shall be assigned to that State’.” .