Editorial: GST still haunts the Government

The dust raised over the implementation of new tax regime, GST in the state of Jammu and Kashmir fails to settle down as the Jammu Kashmir Coordination Committee (JKCC) formed by various trade bodies in Kashmir have demanded the withdrawal of Presidential Order with regard to GST asked New Delhi to declare Jammu and Kashmir as Free Economic Zone (FEZ).

JKCC confronted the State Government on safeguarding the special position while extending the central GST law to the State. JKCC said that after analyzing the presidential order it was found out that the State Government by its false propaganda, had not only hoodwinked people of the State but also their own legislators.

The civil society group have been stressing that the suggestion of the trade bodies to make separate GST law for the State of Jammu and Kashmir which could have synchronized with the Union law had been ignored totally.

Does that mean the state Government had only ended up in collaborating with the central government to extend the GST law to the state that was otherwise extended by the union government to every other state of India.

What is important is that the implementation of the GST had been opposed by traders in Kashmir as they expressed their reservations over its realization.

GST is an indirect tax system implemented across India. This new tax regime is aimed to replace 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’s view is that in terms of consumer point of view, the biggest advantage would be reduction in 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.

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.

In such a scenario, wherein JKCC is threatening to launch an agitation against the implementation of GST and is demanding withdrawal of the Presidential order, what are the possible solutions before the government.

Is it possible for the state government to do away with the GST which is now an act of the state legislature also. Will the state government be in a position to frame a separate GST and impress upon the federal government to declare the state as a Free Economic Zone.

The answer to all these questions seems a distant dream. The JKCC which is now filing various claims against the implementation of the GST itself does not have any answers for the various questions they are raising. By raising a war cry the civil society seems to be doing more of a politicking rather than trying to address the core issue, And the issue is restoring the fiscal autonomy of the state.

Leave a Reply

Your email address will not be published.