GST in Kashmir: All-party meet held on Thursday to evaluate political consensus ahead of roll-out
Traders and the opposition have been saying that implementation of GST will have ramifications on the State’s fiscal autonomy
The crucial all-party meeting is going be held in the capital Srinagar today, to evaluate a political consensus for bringing Jammu and Kashmir, under the ambit of Goods and Service Tax regime, which will be rolled out in the country on 1 July.
The meeting was held in Srinagar between National Conference and other Opposition parties and the state government. They had earlier circulated the draft of the Constitutional Amendment 101 which sets out the condition under which the state will come under the new tax regime following a hue and cry over the erosion of "fiscal autonomy of the Jammu and Kashmir".
The National Conference had expressed concern over the extension of Constitutional Amendment 101 of the Constitution of India to Jammu and Kashmir. The state enjoyed special status under Article 370 and draws its taxation powers from its own constitution. The Opposition is seeking a clear draft of what the government will do. The government has said it will assure the concerns but pointed out that the actual drafting is the property of the house.
“The GST in the Jammu and Kashmir state will be a special GST not a separate GST,” Finance Minister Haseeb Drabu said in an interaction with journalists. He said there is going to be chaos for a few months because the new tax regime is a major “policy disruption,” that intends to change how business is transacted in India.
The state government led by BJP-PDP had been struggling to build a consensus on the implementation of the law. Chief Minister Mehbooba Mufti has said that the law should be debated in the assembly and therefore there should be a broader consensus before implementing the law.
However, the traders and the Opposition have been opposing the law saying that implementation of GST will have ramifications on the State’s fiscal autonomy and impinge upon the residuary powers enjoyed by Jammu and Kashmir.
But Drabu assured that there will be no erosion of the special status of the Jammu and Kashmir constitution. “All states draw powers for taxing through Article 246 of the Indian Constitution but Jammu and Kashmir draws powers for taxing from Section 5 of the State’s constitution and we will not compromise on either,” Drabu said.
“The perceptions that the fiscal autonomy of the state will be eroded or Article 370 would be impinged or compromised by implementing GST is not right,” he said.
“Can we live as an isolated economy? We can’t even get basic amenities of life like salt and edible oil,” Drabu said, adding that “the worst sufferers of not implementing GST will not be the government but the traders and the common masses,” he said.
National Conference leader and former finance minister of the state, Abdul Rahim Rather, said if the constitutional amendment made by Parliament is applied, then the central council on GST will have the power to make any changes in CGST and SGST.
“The implementation of GST will empower the Centre to levy tax on service in any state which is not the case without GST,” Rather said.
Kashmir is reeling under an unrest from last July and the state government has been apprehensive that the implementation of the law may create another turmoil leading to chaos on the streets.
“The way we have been dehumanised. Anything can spark off. It is in the interest of the society of J&K to build a political and legislative consensus over GST. Eventually, anything and everything is political in Kashmir,” Drabu, said.
After the first all-party community which was headed by senior PDP leader Muzaffar Hussain Baig that was boycotted by the opposition, today's meeting will try to evolve a consensus to avoid further politicisation of the implementation of the GST.
Shakeel Ahmad Qalander, an industrialist based in Kashmir, said the state government failed to educate the masses about the modified version of the GST law for the state, which has unnecessarily turned the financial exercise into a political issue.
“I think both sides talk almost in the same language on GST, it is politics that keeps the issue wide open and everyone seemed to be confused. There was a need to educate the people which the state government failed to do,” Qalander.
Net direct tax collection in the April-June quarter of the current fiscal is over Rs 2.46 lakh crore, as against more than Rs 1.17 lakh crore during the same period of the previous fiscal
Shortfall in GST compensation to states in the current fiscal estimated at Rs 2.59 lakh crore, of which about Rs 1.59 lakh crore would have to be borrowed