The state assembly is all set to meet today and again this time the legislature will be discussing the vital GST bill that according to the government needs to be implemented in the state.
The GST whish has already been rolled out in all Indian states is being seen by the government as a tax regime that will benefit the common masses besides leave all doors closed for those who are involved in tax evasion and under stating their achievements in trade and commerce.
Traders in Kashmir have expressed their reservations over its implementation. Traders during a meeting with the state’s Chief Minister categorically stated that they were against the implementation of GST in the state. Their take on the issue seems more political in nature rather than economical.
Even though the traders have formed a joint forum and have announced that they will announce a version of GST act that will favour the state, but the assertion by the traders should have been ready by now so that same could have been discussed and if the need arises discussed in the assembly.
There is a general belief that implementation of GST will compromise the state’s financial autonomy. The fears expressed by the trade community are based on certain truths and half truths.
But what can be clearly said is that most of these reservations have been allowed to crop up as the political parties in the state too have not been clear and open in their opposition on the implementation of GST in the state. Since the government too does not want to land itself in any uncomfortable position, it decided to convene an all-party meeting on June 13. However, the meeting also proved to be inconclusive as no decision could be arrived at during the meet.
GST is an indirect tax regime, implemented across India. The regime has replaced taxes imposed by state and central government. It was introduced as the constitution (122 amendment) Act 2016, following the passage of Constitution’s 122nd amendment bill.
New Delhi believes that introduction of GST is a step in the reform of indirect taxation and it subsumes several central and state taxes into a single tax that would mitigate the problem of double taxation.
The Union government is pressing on the state that in terms of consumer point of view, the biggest advantage that can be counted on GST is that it would reduce the overall tax burden on goods, which is currently estimated at 25%-30%, free movement of goods from one state to another without stopping at state borders for hours for payment of state tax or entry tax and reduction in paperwork to a large extent.
It has also argued with the state that GST will incorporate various indirect taxes including central excise duty, services tax, additional customs duty, surcharges, state-level value added tax and octroi. Other levies which are currently applicable on inter-state transportation of goods will also be done away as the GST regime is in place now.
However, Article 370 of the Constitution grants special autonomous status to the state of Jammu and Kashmir. The Parliament of India retains the power to make laws on defence, external affairs and communication-related matters of the state. This is one of the reasons why the service tax levied all over the India since 1994 is still not applicable in J&K. The state levies its own taxes for services provided.
The state government of J&K can still integrate its revenue with Goods and Services Tax, provided they pass two separate bills in the state assembly. The J&K Assembly will have to pass a legislation stating that the two laws viz. Central Goods and Services Tax (CGST) and Integrated Goods and Services Tax (IGST) are applicable to them. This approval by the state assembly will be in addition to the requirement of all states to approve the State GST law.