The Lok Sabha on Tuesday passed the Provisional Collection of Taxes Bill, 2023, which grants the government the power to provisionally impose and collect increased duties for customs and excise.
The provisional power would be timebound for 75 days, within which the government will have to seek parliamentary approval for the new rates. Otherwise, the amount would be invalid and refunded.
The purpose of the bill is to provide tariff protection to domestic industry on an immediate basis, moderate domestic prices when the prices increase, avoid speculation in the market and lastly for revenue considerations, said Finance Minister Nirmala Sitharaman.
"Article 265 of the Constitution provides that no tax shall be levied or collected except by the authority of the law... What this bill seeks to obtain is the authority from the Parliament to provisionally levy and collect the newly imposed or increased duty of the customs and excise for 75 days," Sitharaman said.
The bill will replace the erstwhile Provisional Collection of Taxes Act, 1931. "We have just made minor changes and we are, therefore, not bringing a new law, but with a mildly amended existing law," the minister said.
She further explained why only central excise and custom duties are included in the bill. In the case of direct taxes, the changes to the Finance Bill is made in February, before it comes to effect from April 1 of the same year. So, there is no need for provisional collection.
Whereas, in the case of GST (under indirect taxes), the rate changes are carried out based on the council's recommendation for the change in rate and the effective date of change.
Comprehensive Budget 2026 coverage, LIVE TV analysis, Stock Market and Industry reactions, Income Tax changes and Latest News on NDTV Profit.
