Legislature to debate draft legislation; JK’s interests, special constitutional position taken care of: Fin Min
SRINAGAR: Minister for Finance, Haseeb Drabu made a detailed presentation Wednesday before the cabinet covering all aspects of GST.
He informed the Cabinet that all major decisions regarding implementation of GST in the country have been taken by the GST Council and GST will be rolled out throughout the country from 1 July 2017. He informed the cabinet that “the interests of the state and special constitutional provisions so far as the State of Jammu and Kashmir is concerned, have been taken care of and protected”.
Drabu also referred to the statement made by the Union Finance Minister, Arun Jaitley in Srinagar while attending the 14th GST Council meeting that “the State Legislature is competent to take all decisions related to the implementation of the GST”.
“Only the relevant provisions of the 101st Constitutional Amendment Act will be presented before the State Legislature for ratification,” Drabu informed the Cabinet.
He further apprised the Cabinet that the implementation of GST in no way “infringes upon Article 370 or the Constitution of the State of Jammu and Kashmir”.
He further apprised the Cabinet that Section 5 of the Constitution of Jammu and Kashmir “will remain untouched from where the State Government derives the financial autonomy and power of taxing”. This means that the State Government shall remain free to levy any additional tax or new taxes on such commodities which doesn’t come under the purview of GST.
“Out of three components of GST, two of them namely, IGST and CGST have been existing and remain applied to the State of Jammu and Kashmir in the form of CST and Central Excise Tax,” the Finance Minister further added.
For replacement of VAT with SGST, “the State Government has drafted its own legislation which will be presented before the State Legislature for approval”.
Drabu also informed the Cabinet that the State of Jammu and Kashmir has successfully “negotiated to protect the interests of industries and SME sectors of the State which enjoys tax exemption under the State Industrial Policy”. He informed the Cabinet that these exemptions or benefits to the industry will continue in the form of reimbursement.
The Finance Minister also apprised the Cabinet that unlike other States, the dealers based in the State will be subject to the administrative control and audits and inspection by the State Tax Administration. “With GST being a self assessed based tax regime, only 5% of dealers based on a risk assessment will be subject to audit every year which will give a major relief to the business community”, he said.
“All tax disputes arising in respect of dealers based in the State will be decided by the Tribunal set up by the State Government unlike in the case of other States.”
The Cabinet noted with satisfaction that cross LoC trade in its present form will continue un-effected by the roll out of GST.
“We have retained the right to review the experiences gained from implementation of GST after the compensation period is over,” further informed Drabu.
The Cabinet also noted that the J&K being the consuming State, the GST will be beneficial to consumers, producers in terms of cheaper inputs and the State Government in terms of higher revenue.
The Finance Minister also apprised the Cabinet that the “tax rates of almost 95% of commodities have actually gone down after accounting for Input Credits and Cascading effect”.
“The dealers having turnover of less than Rs.10.00 lakhs need not file tax returns and those having turnover less than Rs. 50.00 lakhs can avail the benefits of the Composition scheme,” he added.
The Cabinet also noted that the non roll out of GST in the State of J&K will cause “immense harm to the State finances and business community”.
“Non implementation will virtually stall the trade and business with other parts of the Country. The consumers will face immense hardships in view of significantly high costs of all goods and services. Manufacturing industry will not receive input credit and thereby will become uncompetitive. Needless to say that there will be heavy loss of revenue to the State Exchequer,” the Cabinet further noted.
Hasseb Drabu apprised the Cabinet regarding the preparedness of the State administration for implementation of the GST from July 1st, 2017. “All required IT infrastructure has already been put in place. The provisional ID’s of all existing dealers have been generated and the data in respect of almost seven thousand dealers have been migrated to the GST Portal. The GST Portal is now continuously open for migration of the existing and as well as registration of new dealers,” he added.
“The Commercial Taxes Department have already organized various seminars and training camps in the State and in the coming days the same will be done on daily basis,” he further informed the Cabinet.
He further added that robust training programmes educating the dealers have been put in place and all dealers can avail the same in the office of Commissioner Commercial Taxes.
The Cabinet while approving the draft Legislation also directed the Finance Department to consult more legal luminaries as may be required and thereafter the legislation vetted by the Law Department before the same is introduced in the State Legislature for accuracy.