J&K's GST logjam continues: National Conference demands separate tax law to protect state's autonomy

Consensus seems to be evading between the ruling and the opposition parties for bringing Jammu and Kashmir under the ambit of Goods and Service Tax regime, with the National Conference in a major turnaround yesterday demanding a separate GST Law to protect the fiscal autonomy of the state. In the second meeting of the all party consultative group on GST set up by the state government, former finance minister and senior National Conference leader Abdul Rahim Rather said his party was not in favour of extending constitutional amendment 101 Act to Jammu and Kashmir, and wanted the government to formulate its own law. Rather, the former chairman of the GST Council had earlier demanded adequate safeguards before extending the amendment to Jammu and Kashmir. Well placed sources told Firstpost that when Muzaffar Hussain Baig, member of parliament, who heads the consultative group on GST, was asked during the meeting on Thursday whether his party was in favour of extending the constitutional amendment 101 Act to Jammu and Kashmir. Beg, however, bluntly replied in negative, in a way departing from his parties traditional stance on the issue which has been seeking only safeguards and not a separate law. [caption id=“attachment_2940664” align=“alignleft” width=“380”]  Representational image. Reuters[/caption] “The National Conference wants to create a political chaos in Jammu and Kashmir which is why the party is shifting its goal posts on GST. I have suggested in the meeting that Jammu and Kashmir should seek safeguards for protection of Section 5 of the J&K Constitution which gives powers to it to impose taxes and should have a say in imposition of taxes by the Goods and Services Tax (GST) Council,” Muzaffar Hussain Baig, said. Baig said Article 246-A of the Constitution of India, under which the government of India will impose GST, should be preceded by the rider that the constitutional powers of J&K under Section 5 of the State Constitution shall remain intact so that the state government can exercise its powers on (tax) rates at any time. J&K government has not only failed in convincing the opposition but has also lost the battle of perception in the valley due its alliance with BJP. The party is facing huge resentment in Kashmir and any move to erode the special status projects the party as a virtual arm of the Hindu nationalists. Jammu and Kashmir finance minister Haseeb Drabu had said on Wednesday that anything can “spark off” in valley. “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.” National Conference had expressed concern over the extension of Constitutional Amendment 101 of the Constitution of India to Jammu Kashmir. The state enjoyed special status under article 370 and draws its taxation powers from its own constitution. The opposition is seeking clear drafting of what government is going to do but the government says it will ensure the concerns are addressed but the actual drafting is the property of the house. The first all party community, which was headed by senior PDP leader Muzaffar Hussain Baig that was boycotted by the opposition yesterday, was to evolve a consensus to avoid further politicisation of the implementation of the GST. The traders have also shown concern over the rollout of the GST in Jammu and Kashmir. A one day token strike was also observed in Jammu and Kashmir. An influential group of citizens from Kashmir termed the government proposal to extend 101st Constitutional Amendment for the introduction of GST in the state a “lethal assault” on its autonomy. “The state would lose its law-making powers on taxation matters (once the GST is implemented). The Parliament would then make laws on indirect taxes for J&K and the GST Council would decide on tax rates for us,” he said,” former High Court judge Hasnain Masoodi, said during the roundtable. “Our position is different from other states. While constitutional amendments are ipso-facto applied to all other states, these cannot be extended to J&K until and unless the state government gives its concurrence,” he said. “The State, once stripped of its power to decide on the imposition of tax - an important component of its sovereignty, shall lose, whatever is left of its autonomy,” the group said in a statement.