The opposition political parties today derailed the ruling PDP-BJP government’s race towards the extension of the Goods and Services Tax (GST) to J&K, which is shielded from Central laws by its special constitutional status within the Indian Union.
Both principal opposition parties National Conference (NC) and Congress opposed the extension of the GST to J&K, saying it would be a compromise on the financial and political autonomy of the state.
“We will not allow anything that jeopardises our constitutional position. We told the government that we won’t allow extension of the GST to J&K unless fiscal and political autonomy is safeguarded,” senior NC leader Nasir Aslam Wani, who attended the meeting, told Kashmir Post.
Wani said the Chief Minister assured them that the government would invite constitutional experts for a broader discussion on the issue. “The Chief Minister told us that the government will defer the special session on the GST scheduled to be held on June 17. For framing the GST, the Central government took 15 years and here they want to do it in 15 days,” he said.
He said the GST would be an infringement on Article 370 of the Indian Constitution which grants special status to J&K.
The Congress also voiced its apprehensions over the GST extension to J&K, saying it would surrender fiscal and political autonomy of the state. “We opposed the extension of the GST because we don’t want any compromise on the fiscal and political autonomy of the state,” Congress leader GN Monga said.
To break the ice over the extension of the GST to J&K, Chief Minister Mehbooba Mufi had today convened an all-party meeting, which lasted for more than two hours here at SK International Convention Centre.
The meeting was called after the principal opposition party National Conference had said the extension of the GST would erode the financial autonomy of the state, which it draws from Section 5 of its constitution.
The Chief Minister said the idea behind convening the all-party meeting was to evolve a broad-based consensus on adopting any tax regime in the state.
However, the participants, mostly from the NC and Congress, voiced their apprehensions and objections against the extension of the new tax regime, which will be rolled out on July 1.
The PDP-BJP government is evolving a consensus to extend to J&Kthe 101st Constitutional Amendment Act of the Indian Constitution under which the GST will be applicable to all states, except J&K. However, the 101 Constitutional Amendment Act would require a Presidential Order before it could be extended to J&K.
The state government has called for a special Assembly session from June 17 to discuss the ways and means for the extension of the GST to J&K.
Apart from Mehbooba, Deputy Chief Minister Nirmal Singh, Finance Minister Haseeb Drabu and Social Welfare Minister Sajjad Gani Lone were present in the meeting.
Drabu highlighted the broader contours of the new tax regime and the benefits that it would extend to the state. He said the J&K legislature could enact a comprehensive GST law where the tax would be levied corresponding to the aggregate state GST and Central GST. “We will harmonise the 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.
He said in the event of non-participation by J&K in the GST regime, the state would “become small, isolated, closed-door economy with all negative consequences and cascading tax, which will impact the economy and trade in the state”.
Drabu said in case the J&K government didn’t extend the GST to the state, it would double the taxes on commodities and no one would want to do business with traders of the state, “Share of taxes in indirect taxes will be zero causing a loss of Rs 5,000 crore,” he said.
He said, “The state has 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.
Former Finance Minister Abdul Rahim Rather, who was chairman of the Empowered Committee of State Finance Ministers on GST panel from 2013, led the NC delegation, while a three-member delegation of the Congress was led by Monga.
The ruling PDP was represented by Sartaj Madni, while its coalition partner BJP was represented by state party president Sat Sharma and two state spokespersons Sunil Sethi and Arun Gupta.
National Conference, Congress say no to GST in State
