Excelsior Correspondent
JAMMU, Aug 1: State Cabinet, which met under the chairmanship of Chief Minister, Omar Abdullah, at summer capital of the State this evening, accepted in totality the recommendations of Cabinet Sub-Committee on introduction of new Goods and Services Tax (GST) regime.
Authoritative sources told EXCELSIOR that in keeping with the present day needs, the Union Government is contemplating a switch over to a new Goods and Services Tax regime in which almost all taxes, collected presently, will be subsumed and for this proposed Constitutional Amendment Bill is presently before the Parliamentary Standing Committee for scrutiny.
Keeping in view proposed amendments in the Constitution of India and bearing of the same on the constitutional relationship between the Centre and Jammu and Kashmir, which enjoys a special status unlike other States of the country, the State Cabinet vide its decision dated August 26, 2010, constituted a Cabinet Sub-Committee in order to put the well considered views of the State Government before the Empowered Committee of Finance Ministers of the country as also the Parliamentary Standing Committee.
The Cabinet Sub-Committee headed by Finance Minister, Abdul Rahim Rather and comprising Minister for Law, Justice and Parliamentary Affairs, Ali Mohd Sagar, Minister for PHE, Irrigation and Flood Control, Taj Mohi-ud-Din and Minister for Health, Sham Lal Sharma, held various meetings, sought advice from constitutional and legal experts on the issue, sources said.
In the meantime, M L Verma, Senior Advocate of the Supreme Court was engaged by Advocate General, who furnished his legal opinion on the matter for the protection of special status of Jammu and Kashmir vis-a-vis implementation of Goods and Services Tax regime.
“The opinion furnished by the Senior Supreme Court Advocate was discussed in the Cabinet Sub-Committee following which it was decided to constitute a committee of officers to examine the opinion from all aspects”, sources said, adding after detailed deliberations, the Committee comprising Advocate General, Secretary Law Department, Commissioner, Commercial Taxes and Gourav Pachnanda, Senior Additional Advocate General furnished its report on July 16, 2012.
“The Cabinet Sub-Committee discussed the report of the Committee of officers and its recommendations and there was broad agreement on the course of action suggested by the Committee”, sources said, adding “the Cabinet Sub-Committee is of the opinion that bringing in a State legislation on the subject, which is broadly in harmony with the Central legislation, would serve the purpose”.
In the GST regime, proposed under the Constitution Amendment Bill, the State Goods and Services Tax and State Component of Integrated Goods and Service Tax is proposed to be levied and collected by all the respective States. Similarly, the Central Goods and Services Tax and the Central component of IGST is proposed to be levied and collected by the Union of India.
However, in the alternate GST regime, now proposed by the Jammu and Kashmir, the State would adopt the GST rates applicable to other States while exercising its own legislative competence, sources said. However, all the components of GST would be levied by the State itself under a proposed State legislation, which would be analogous to the statutory framework, proposed by the Union of India for all other States.
The State would then quantify the component of CGST and IGST, which the State has collected for and on behalf of the Union of India, and pass on such component to the Union of India after deduction of collection charges.
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