Extension of GST Regime to JK: Parties Fail to Build Consensus

Srinagar—Broader consensus seemed to have emerged, during the All Party Meeting convened here on Tuesday, on bringing Jammu and Kashmir under the ambit of Goods and Service Tax (GST) regime.

The meeting was called by Chief Minister Mehbooba Mufti after NC and Congress opposed its extension to J&K stating that GST will erode fiscal autonomy of the state and Article 370.

The meeting that lasted for around four hours saw participants raising their apprehensions and objections to extension of GST.

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Though there was broader consensus on the extension of the GST regime to the state, the opposition insisted for deferment of the special session of the legislature called by the government from 17-20 of this month.

Some opposition leaders said that the government has agreed to postpone the session and will hold further wider reviews and debates on GST’s impact on fiscal and political autonomy of the state.

According to National Conference provincial president Nasir Aslam Wani, the party leaders informed the meeting that NC will oppose the draft legislation bill on GST if it does not safeguard the fiscal and political autonomy of the state.

“The outcome of the meeting was that the Government agreed to defer the scheduled four day Assembly session on GST beginning on 17th of this month. The government will hold a obituary session on 17th and then will defer the session. We demanded to form an expert committee which will review the GST bill and its applicability on fiscal and political autonomy of the state,” Wani said.

“If the GST is extended to the state without holding broader review and consensus, it will give a big blow to our fiscal autonomy. We are for tax reforms but we should form our laws to safeguard our fiscal and constitutional autonomy,” said CPI (M) leader Tarigami.
“The government should form a group of economic experts to review the draft bill and central draft bill to explore its applicability and impact on Jammu and Kashmir”, Tarigami said.

PDP General Secretary Nizam-u-Din Bhat said that the opposition leaders demanded that the Special Assembly session on GST should be postponed till there is broader consensus on its extension to the state.
“Chief Minister told the leaders of opposition parties that the government has no hesitation in deferring the Special Session on GST,” Bhat said.

Though the session will be held on 17th but the Business Advisory Committee will decide on the same day about deferring the session.

The 4-hour marathon meeting, chaired by the Chief Minister Ms Mehbooba Mufti, was also attended by Deputy Chief Minister, Dr Nirmal Singh, Minister of Finance, Dr Haseeb Drabu, Minister for Revenue, Abdul Rehman Veeri, Minister for RDD, Abdul Haq, Minister for Social Welfare, Sajad Gani Lone and Minister for Health and Medical Education, Bali Bhagat.   

Chief Secretary, B B Vyas, Principal Secretary to Chief Minister, Rohit Kansal and Commissioner Secretary Finance, Navin K Chaudhary were also present in the meeting.

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An official spokesman meanwhile said, that during the meeting, all the political parties broadly agreed that the state of Jammu and Kashmir is likely to be on the loser’s side if it is not brought under GST regime which will be rolled out on July 1. However, they argued that the extension should not come at the cost of compromising the state’s fiscal autonomy

Minister of Finance, Dr Drabu, highlighted the broader contours of the new tax regime and the benefits that it will accrue to Jammu and Kashmir. He said staying away from GST is not a realistic option for the state.

“The meeting has been called to give broad sense and discuss the issues with the new tax regime. There is a lot of wisdom and experience in this room. It is not only the government but the opposition is also responsible for harmonizing the law so that the special status of the state is safeguarded while implementing GST regime,” he said.

He said J&K Legislature can enact a comprehensive GST law where tax will be levied corresponding to aggregate SGST and CGST. “We will harmonize GST in J&K by extension of only such limbs of Constitutional Amendment 101 which are already applicable to JK, thereby keeping special status and fiscal autonomy intact,” he said.

“In the event of non-participation by J&K, the state will become isolated having a closed door economy with all negative consequences and cascading tax which will adversely impact the economy and trade in the state,” Dr Drabu said.

He said in case J&K government doesn’t extend GST regime to the state, it will double the taxes on commodities and no one will do business with traders of the state. “Share of taxes in indirect taxes will be zero causing a loss of Rs 5000 crore to J&K,” he said while making a power point presentation in the All Party Meeting on the new tax regime.

He said the GST is the most favoured indirect tax system running in the world which has few tax rates and exemptions, broadens tax base, reduces prices and establishes a transparent tax system.

“The state of Jammu and Kashmir derives its authority to tax from Section-5 of the Constitution of J&K, so there is no question of surrendering the state’s fiscal autonomy,” he said.

Senior PDP leader and Member of Parliament, Muzaffar Hussain Baig and BJP’s state president, Sat Sharma, and PDP vice-president, Sartaj Madni, were also present in the meeting.

The National Conference was represented in the meeting by Mohammad Shafi, Abdul Rahim Rather, Devinder Singh Rana and Nasir Aslam Wani. From the Congress, the meeting was attended by Nawang Rigzin Jora, Usman Majid and Ghulam Nabi Monga. CPI (M) General Secretary MY Tarigami, Ghulam Hassan Mir of DPN, Hakim Mohammad Yasin of PDF, Nizamuddin Bhat, Abdul Rashid, Pawan Kumar Gupta and Harsh Dev Singh were also present.  -With inputs from KNS

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