State Legislative assembly and the legislative council on Wednesday adopted the resolution on GST while the opposition parties National Conference and Congress protested the extension of the central law to the state.
However, after concerns were raised by the members of different political parties over the issue in the legislative assembly, Finance Minister, Haseeb Drabu, said that the government will recommend to the President of India to issue a constitutional application order that safeguards the special status of the state.
He said that the constitutional application order which would be issued by the President will seek the protect the rights of the state conferred under section 5 of the Jammu and Kashmir constitution to impose taxes as well as the special status of the state under Article 370.
Earlier the resolution that was moved by Drabu in the Legislative Assembly read that the Assembly resolved that the government of J&K “may give consent to the adoption of the GST regime by application of relevant amendments made to the Constitution of India in a modified manner to safeguard the existing special constitutional position of J&K in the Union of India and legislative powers under the constitution of J&K.’’
Finance Minister Dr Haseeb Drabu assured that the government will protect the Article 370 to extend goods and services tax to the state. “Section 5 and Article 370 of the state constitution will remain unchanged,” he assured.
Besides, Dr Drabu said that Jammu and Kashmir will retain powers to tax. Drabu also said that the “exemptions, remissions and subsidies across the different sectors will continue in the state.’’ However while the resolution was adopted with voice vote in the legislative assembly, NC and Congress MLAs protested and even tore the copies of the resolution which were tabled by the government. Former CM and NC working president, Omar Abdullah, took to twitter to describe the resolution as “ sham’’. He said that if the government had decided to pass the resolution there was no need for the “ theatrics’’.
Earlier, participating in the debate on GST, members put forth their apprehensions on the GST regime.
Drabu said under no “circumstances will the state government amend the section 5 of constitution of J&K which gives it special taxation powers.’’ He said “such a move will open a Pandora’s box which will have implications on the Special Constitutional Position of J&K in future.’’
“We are proposing that the Article 370 shall not be compromised in any way through the Presidential Order. The GST Council should not be a way to subvert the process and enough safeguards are built to empower the constituents of J&K in the Council. Besides, the exclusive powers of the State to tax and the Consolidated Fund of J&K shall not be impaired,” he said.
Expressing concern about declining trade in J&K due to uncertainty over GST, Drabu said only 1000 truckloads of goods crossed the Lakhanpur toll post on July 4, which was down by half when compared with the figures of the corresponding period of last year. “The exports have also halved with only 150 truckloads of goods moving from J&K to other states. This is adversely impacting our trade and economy,” he said.
Drabu said the state government is not under any pressure to extend GST to Jammu and Kashmir. “We are not working under compulsion but for the restoration of certain processes and constitutional morality which lays foundation of a true democracy. It is the biggest tragedy of our time that we have lost our tradition of dialogue which is why we brought the resolution for GST to the House to revive that culture of consultation. We wanted a consensus on the issue,” he said.
Dr Drabu said the resolution on GST, which was passed by the House today, is a statement of a principle. “The sense of the House is that no one has issues with GST per se. There might be differences with modalities of applicability which is why we want this law to be backed by the state government and legislative process so as to prevent any harm to the consumers and trade without compromising on the state’s special position,” he said.
Hitting out at the Opposition for making an issue out of a non-issue, Drabu said the “new indirect tax regime is the biggest democratization of public funds in the world and J&K, being a consumer state, will immensely benefit from it.’’
“We are not touching the constitution of J&K, so where is the question of violation of basic structure of constitution? Under previous regimes, 94 out of 97 items in union lists have been made applicable to J&K. The Opposition can’t keep on deceiving people by trying to create misconceptions vis-à-vis JK’s Special Status. The Congress issued Presidential Order in 1986 to essentially make laws for the state. After the 1986 ordinance which was effectively the withdrawal of residuary powers of the state, three months later, National Conference formed the Government in the State with Congress,” he said.
The Finance Minister said the GST Council is the first truly federal institution in the country.
“India is moving from coercive to cooperative federalism. The Opposition is selectively looking at the loss of powers of states but not one is looking at the loss of powers of union to the GST council,” he said.
Drabu said the Article 370, which gives special status to J&K under Indian Constitution, should be protected and used for development of the state and for the empowerment of people.
“Instead, it is being used as a tool to whip up political passions and draw political mileage. It is being used for creating fake controversies,” he said.
Reacting to the demand of the Opposition to bring a separate GST law for Jammu and Kashmir, Drabu said alternative law will require amending Constitution of J&K and of India.
Later, the Finance Minister made similar assertions in the Upper House regarding GST.