SRINAGAR: Minister of Finance Dr Haseeb Drabu assured on Monday that his government will not compromise the fiscal autonomy of Jammu and Kashmir under the new GST regime. “Other states draw powers to tax from the Constitution of India while we draw our powers from our own Constitution. Those legislative powers have not been compromised, so there is no question of compromising fiscal autonomy,” he said.
Drabu said it is for the first time in the history of Jammu and Kashmir that a Constitutional Amendment required to extend a Central law to the state will be debated in the State Assembly. “People of J&K must understand what is at stake, which is why we are holding a special assembly session,” he said.
“Article 370 is safe and modalities are safe. You should recognise that we are setting a precedent. It is my understanding that the Union is sharing sovereignty with the states in the taxation space,” he said.
“We can defer the GST implementation but it will impact the business of Kashmir more than the government. In the absence of GST in J&K, no one would want to trade with us. And if they do trade, the consumer will be penalised through double taxation. Let me assure you that no one will be put to a disadvantage under the GST regime. In fact, J&K will be the first state to do GST refund for shoppers on handicrafts,” he said.
“GST as a system is running successfully in 198 countries. Let me assure you that there can be no better system for traders than GST. Besides, the system of exemptions will also continue in J&K. Modalities will be worked out in coming days as there is uncertainty all across India and J&K is not unique to it,” Drabu said.
He said the implementation of GST is being discussed since 2002 and the law has evolved over the years. “Earlier, GST was supposed to be a single rate, single tax with no GST Council. Today, not one decision has been taken without the consultation of other states, which is why I have repeatedly said that GST council is India’s first truly federal institution,” he said.
The meeting called by the government on Monday to discuss the GST was attended by Commissioner Secretary Finance Navin K Chaudhary, Commissioner Sales Tax, Kashmir, Pervaiz Khateeb, representatives of business chambers of Jammu and Kashmir regions, Kashmir Traders and Manufacturers Federation, Kashmir Traders and Manufacturers Association, Kashmir Restaurant Owners Federation, Hoteliers and other business leaders of the state.