New Delhi: Jammu and Kashmir assembly on Wednesday adopted a resolution to implement the goods and services tax (GST), bringing the state’s indirect taxation into the new unified tax regime that the rest of the country adopted on 1 July at a landmark ceremony in Parliament.
News agency PTI reported from Srinagar that the resolution moved by state finance minister Haseeb Drabu was adopted through a presidential order calling on the Centre to safeguard the special status and exclusive taxation powers of the state.
“This House resolves that the government of Jammu and Kashmir may give consent to the adoption of GST regime by application of relevant amendments made to the Constitution of India in a modified form to safeguard existing constitutional position of J&K in the Union of India and the legislative powers under Constitution of J&K," Drabu read from the resolution.
Adopting GST integrates Jammu and Kashmir with the rest of the nation in terms of indirect taxes. Not joining the GST would have resulted in higher cost of goods in the state that are imported from other states. Also, exports from Jammu and Kashmir would have become costlier to other importing states, affecting the competitiveness of industry in the Himalayan state.
On 26, June, finance minister Arun Jaitley had written to chief minister Mehbooba Mufti Sayeed urging her to introduce GST in the state along with the other states.
Being an active participant in designing the GST architecture, J&K had hosted the 14th meeting of the GST Council, the powerful federal indirect tax body, where tax rates for goods and services were fixed.
Drabu told the assembly that Article 370 of the constitution, giving J&K special status, is not compromised in any way through the presidential order. The resolution was adopted by a voice vote even as the National Conference and the Congress protested against implementing the new indirect tax regime in the state in its present form.
Former Jammu and Kashmir chief minister Omar Abdullah termed the resolution a sham saying there was no clarity on the constitutional safeguards for the state. “With absolutely no clarity of what ‘constitutional safeguards’ the BJP-PDP government in J&K has agreed with the centre, the sham resolution passes," Abdullah wrote on Twitter.
Drabu said the business activity in the state had dropped almost by half due to delay in implementing the GST while the rest of the country had moved to a new tax system. Drabu said that while 2,000 truckloads of goods were imported on 4 July 2016, only 1,000 truckloads were imported on the same day this year.