To avoid any “erosion” of the State’s autonomy, the J&K government has convened a special Assembly session on Goods and Services Tax (GST) on June 17.
State Finance Minister Haseeb Drabu said GST will not apply to J&K under Article 370, which gives the State a special status. “GST was brought in under the 101st amendment Act and it does not apply to J&K. We must use the Assembly for extending the constitutional amendment to the State. The amendment will be applied in a modified form... J&K’s powers to tax will not be compromised in any way,” he said here.
The ruling Peoples Democratic Party Minister said the J&K government had prepared a draft bill to be tabled for a discussion, in the wake of Opposition parties like the National Conference expressing apprehensions that the State’s autonomy would be compromised. “If we don’t extend GST, then no business can be done in J&K profitably. All businesses in J&K will then have to pay two taxes and nobody will supply to J&K because he will face two taxes. So J&K will become an isolated economy.” He said the State government will meet the July 1 deadline to roll out the new tax regime.
“While all States draw their power from the Constitution of India, we draw our power from Section 5 of the J&K constitution,” he clarified.
J&K being a consumer State is set to gain ₹1500 crore in additional tax. “The only issue is that of services, which we are now sharing with the Centre. It is a modified version of VAT,” he said.
He claimed that tax exemptions for J&K have been taken care of by the new regimen. “For J&K, and subsequently for the northeastern States, exemptions in the form of reimbursements will continue, which is exactly what used to happen under VAT. So, it will not become an additional burden.”
