No question of compromising JK’s fiscal autonomy: Drabu

Finance Minister, Haseeb Drabu, today said that the special status of the state will not be compromised to implement the GST in the state.

Broader consensus seemed to have emerged, during the All Party Meeting convened here today, on bringing Jammu and Kashmir under the ambit of Goods and Service Tax (GST) regime, a government spokesman said.

The 4-hour marathon meeting, chaired by the Chief Minister  Mehbooba Mufti, was also attended by Deputy Chief Minister, Dr Nirmal Singh, Minister of Finance, Dr Haseeb Drabu, Minister for Revenue, Abdul Rehman Veeri, Minister for RDD, Abdul Haq, Minister for Social Welfare, Sajad Gani Lone and Minister for Health and Medical Education, Bali Bhagat.  

Chief Secretary, B B Vyas, Principal Secretary to Chief Minister, Rohit Kansal and Commissioner Secretary Finance, Navin K Chaudhary were also present in the meeting.

During the meeting, all the political parties broadly agreed that the state of Jammu and Kashmir is likely to be on the loser’s side if it is not brought under GST regime which will be rolled out on July 1. However, they argued that the extension should not come at the cost of compromising the state’s fiscal autonomy

Minister of Finance, Dr Drabu, highlighted the broader contours of the new tax regime and the benefits that it will accrue to Jammu and Kashmir. He said staying away from GST is not a realistic option for the state.

“The meeting has been called to give broad sense and discuss the issues with the new tax regime. There is a lot of wisdom and experience in this room. It is not only the government but the opposition is also responsible for harmonizing the law so that the special status of the state is safeguarded while implementing GST regime,” he said.

He said J&K Legislature can enact a comprehensive GST law where tax will be levied corresponding to aggregate SGST and CGST. “We will harmonize 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.

“In the event of non-participation by J&K, the state will become isolated having a closed door economy with all negative consequences and cascading tax which will adversely impact the economy and trade in the state,” Dr Drabu said.

He said in case J&K government doesn’t extend GST regime to the state, it will double the taxes on commodities and no one will do business with traders of the state. “Share of taxes in indirect taxes will be zero causing a loss of Rs 5000 crore to J&K,” he said while making a power point presentation in the All Party Meeting on the new tax regime.

He said the GST is the most favoured indirect tax system running in the world which has few tax rates and exemptions, broadens tax base, reduces prices and establishes a transparent tax system.

“The state of Jammu and Kashmir derives 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.

Senior PDP leader and Member of Parliament, Muzaffar Hussain Baig and BJP’s state president, Sat Sharma, and PDP vice-president, Sartaj Madni, were also present in the meeting.


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