THE J&K ASSEMBLY Wednesday passed a resolution to pave the way for the implementation of GST, with Finance Minister Haseeb Drabu saying that constitutional safeguards would be put in place to protect the special status of the state in the new tax regime. “There would be enough safeguards to the Constitution of Jammu and Kashmir,” Drabu said in his reply on the second day of heated debates on GST in the state assembly. Following the passage of the resolution in the assembly, the J&K Cabinet met and approved the implementation of GST. This will now be forwarded to the Governor for an order to be obtained from the President on implementing the new tax regime.
Welcoming the resolution, Union Finance Minister Arun Jaitley posted on Twitter: “Congratulations to the people of J&K for integration of the state with the #GST. J&K is a consuming state and #GST will help it to increase revenue for the state. The consumers in J&K will benefit from #GST. No tax payment twice over.” Central government sources said J&K would “now be effectively under Article 246A”, which provides for GST under the Constitution. “The rates on GST will apply as it is approved by the GST Council,” said sources, adding that fiscal autonomy on expenditure would rest with the state government.
In Srinagar, even as the Opposition National Conference described the special assembly session as “theatrics”, Drabu listed five points on how the government would safeguard the special status of J&K.
* Section 5 of the J&K constitution, which grants the state exclusive powers of taxation, would be protected in the presidential order on GST.
* Article 370, which accords a special position to the state, will not be compromised in the presidential order.
* There will be enough safeguards to empower J&K in the GST Council.
* The GST Council would come under the ambit of Article 370.
* Exclusive powers of taxation by the state government would not be endangered.
Drabu, however, didn’t explain how these safeguards would be implemented, which prompted the Opposition to raised slogans in protest as Speaker Kavinder Gupta put the resolution to a voice vote. The resolution stated: “This House resolves that the Government of Jammu and Kashmir may give consent to the adoption of the GST regime by application of relevant amendments made to the Constitution of India in a modified manner to safeguard the existing special constitutional position of J&K in the Union of India and the legislative powers under the Constitution of Jammu and Kashmir.”
Former chief minister and NC leader Omar Abdullah posted on Twitter: “With absolutely no clarity of what ‘constitutional safeguards’ the… government in J&K has agreed with the centre the sham resolution passes.” Drabu said the Constitution of J&K “would not be touched” and ruled out any further amendment in this regard in the Indian Constitution. “Jammu and Kashmir has acceded to India, India has not acceded to Jammu and Kashmir. We shouldn’t expect them to change their constitution to meet our requirements,” said Drabu. He described the GST regime as the “biggest democratisation of public expenditure in the world”. “We must use it (Article 370) constructively. (It should be) used as a tool of empowerment to people,” said Drabu.
Elaborating on the impact of GST, Drabu said that only 1,000 goods vehicles had entered J&K on July 4 as compared to 2,000 on the corresponding date last year, and that only 250 vehicles left the Valley on the same day as compared to 500 last year. “Since GST has been implemented (in other states), trade has declined by 50 per cent. This (implementation of GST) is important to prevent the breakdown of networks, to prevent pulverisation of our customers and to prevent the financial stress of the state,” said Drabu.
PDP ally BJP’s state president and legislator Sat Sharma said that “one nation, one tax would be a slap on the face of separatists”. “This will support nationalist forces in the whole country and in Jammu and Kashmir,” Sharma said. While the Opposition — National Conference, Congress and independents — is not averse to the implementation of GST, they expressed concern over its political implications on the special status of the state. “As expected, the government reply was full of hyperbole and devoid of substance. The BJPDP government had decided to apply GST, so why the theatrics,” Omar said.