Bill passed in legislature after presidential ordinance, Guv gives ascent, tax regime enforced from Friday midnight
Srinagar: As the clock struck 12 at Friday midnight, the Goods and Services Tax (GST) was rolled out in Jammu and Kashmir, a week after the uniform tax regime was implemented across India. The roll-out was ensured after a showoff during a special session of the state legislature that adopted a resolution favouring conditional implementation of the GST regime. The resolution adoption was a prelude to state government’s ascent to invite presidential order to ensure 101st amendment of the Indian constitution in Jammu and Kashmir.
Even as chief minister Mehbooba Mufti described the presidential order as the victory of the democracy of the country and a tribute to the powers of the State Legislature, finance minister Haseeb Drabu said the state would have no power to come out of the GST regime after it has been implemented.
“The GST will be implemented by Friday midnight after it got approval from both the houses,” Drabu told the media. “We have put appropriate safeguards to save our special status and fiscal autonomy”.
Drabu said that the necessary safeguards to Section-5 of the J&K State Constitution and those enshrined in Article-370 of the Indian Constitution have been incorporated in the Presidential order.
The Section-5 of the state constitution authorizes the local government to form its own laws.
In response to a question, Drabu, however, said that despite the safeguards, the state could not pull out of the GST regime, if it wishes so.
“It is a constitutional change, the state could not take itself out of the GST,” the finance minister said.
The finance minister reiterated that the state will have empowered position as far as GST is concerned, but did not explain how.
“The Financial integration of the state started in 1956 so that grants and funds started flowing from federal government,” he said.
“The Opposition had made a huge issue out of a non-issue by claiming that the fiscal autonomy of J&K will be compromised and the special status of the state under Indian Constitution will be eroded. The Presidential Order has respected the sanctity of the J&K Legislature by safeguarding our Constitutional, Economic and Administrative powers,” Drabu said.
Earlier, the historic Jammu and Kashmir Goods and Services Tax (JKGST) Bill 2017 (LA Bill No. 6 of 2017) was passed by both houses of the legislature with a voice vote.
Finance minister Drabu moved the GST Bill in both the houses which was approved with the voice vote.
According to the finance minister the GST Bill will make the provision for levy and collection of tax on “intra-State supply of goods or services or both by the State of Jammu and Kashmir and the matters connected therewith or incidental thereto”.
He said that the Proviso-3 of the Presidential Order clearly states that: “Notwithstanding anything contained in this order, the powers of the state of Jammu and Kashmir as per Section-5 of the Constitution of Jammu and Kashmir shall remain intact.”
“The Legislature of the state of Jammu and Kashmir shall have the powers to make laws with respect to goods and services tax levied by the state,” Dr Drabu said. “The legislature of the state of Jammu and Kashmir shall have exclusive powers to make laws in respect of imposition of any taxes enabled by Section 5 of the Constitution of Jammu and Kashmir”.
The Presidential order reads that notwithstanding anything contained in clause 4 to clause 11 for the purpose of any decision impinging on constitutional provisions relating to the state of Jammu and Kashmir, the concurrence of the representative of the state of Jammu and Kashmir in the goods and services tax (GST) council shall be mandatory and the procedure provided under Article 370 shall be followed.
It further reads nothing in this article shall affect in any manner whatsoever the legislative competence of the state of Jammu and Kashmir as guaranteed by virtue of Section-5 of the Constitution of Jammu and Kashmir.
Drabu said there will be no entry tax on goods at Lakhanpur.
The opposition parties and business community had all along maintained that GST will erode the the fiscal autonomy and the special status of the state. Theyhave threatened to oppose the GST “tooth and nail” as it would compromise with the state tax laws and the fiscal and constitutional autonomy of the state.
The government had warned that they cannot bring a separate law as it will become a huge political issue across India.