*Baig takes on Oppn, warns Centre can intervene
Sanjeev Pargal
JAMMU, June 29: Barring any last minute intervention, Jammu and Kashmir is likely to miss ‘One Nation, One Tax’ regime, a prestigious new tax structure being launched countrywide on June 30-July 1 midnight at a grand function in the Parliament Hall by President Pranab Mukherjee and Prime Minister Narendra Modi, with consensus again eluding the Consultative Group meeting of all political parties called by the Government in Srinagar this afternoon.
With just a day left for implementation of new tax regime in India, the State Government has not even initiated the exercise to go through two Stages of implementation of Goods and Services Tax (GST), which could lead to virtual crisis in Jammu and Kashmir that was pointed out by Union Finance Minister Arun Jaitley in a letter written to Chief Minister Mehbooba Mufti recently that traders, consumers and the State would suffer for delay in implementing the GST.
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As usual, the Consultative Group meeting, which was third in about a fortnight, called by the Government to evolve consensus on the GST, once again failed to reach any conclusion despite about four hours long deliberations at Nehru Guest House with representatives sticking to oft-repeated stand of their political parties prompting Group chairman and PDP veteran Muzaffar Hussain Baig, a former Finance Minister to remark whether the Opposition parties want the Union Cabinet Secretary to write to the State Government to give concurrence to the new Tax Act or do they want the Centre to take action?
Official sources told the Excelsior that since the Parliament has passed the GST without extending its jurisdiction to Jammu and Kashmir in view of Special Constitutional Position of the State, in the first step Central GST (CGST) and Integrated GST (IGST) have to be extended to J&K through a Presidential Ordinance with concurrence of the State Government i.e. the State Cabinet. Only when this is done, the State Cabinet had to approve the SGST, on the basis of which the Governor can issue Ordinance in the absence of State Legislature session implementing the GST in J&K.
With such a process expected to take time, Jammu and Kashmir could miss the GST deadline, which will be rolled out by the Central Government in the midnight of June 30 and July 1 in the presence of President Pranab Mukherjee, Vice President Dr Hamid Ansari, Prime Minister Narendra Modi, several Union Ministers and Chief Ministers. However, the Central Government has made it clear to the State Government that it wants all States to be on board when the new tax regime is launched on the midnight of June 30 and July 1.
Sources admitted that there could be chaos in Jammu and Kashmir from July 1 as traders of entire country won’t be able to do business with the counterparts in Jammu and Kashmir. Similarly, the traders of J&K would also be unable to sell their products outside the State due to double taxation system. However, they said, once the chaos sets-in, the Government could go for issuance of the Ordinance to implement GST in the State after securing the Special Powers the State enjoyed.
Sources pointed out that Muzaffar Baig once again tried to evolve consensus in the Consultative Group meeting explaining that the State’s fiscal autonomy and Special Provisions would be fully secure but the Opposition parties were unrelenting.
“If we talk of bring a separate law, the Centre will have to amend two chapters in the Constitution to delegate power of taxation to J&K. It will become a huge political issue across the country. Besides, it will also entail amending Section 5 of J&K Constitution which can’t be done. More so, any attempt on fiddling with Section 5 will open a pandora box which will have huge political ramification for J&K in future,” Baig said.
National Conference, which held its Core Group meeting under the chairmanship of Omar Abdullah prior to the Consultative Group meeting, authorized its representative, Abdul Rahim Rather, former Finance Minister to make it clear that the NC was not opposed to implementation of GST but won’t allow any compromise on special status of the State, which has to be protected at any cost. Almost similar was the stand reiterated by Congress representative, Aijaz Ahmad Khan, who said his party supported the GST but the State has to maintain special Constitutional provisions to safeguard fiscal autonomy.
While three Ministers at the Consultative Group-Dr Haseeb Drabu (Finance), Abdul Haq Khan (Law) and Abdul Rehman Veeri (Law and Parliamentary Affairs), as usual, assured the Group members that the GST contained enough safeguards for J&K’s Special Position, sources said PDP representative Nizam-ud-Din Bhat said there would be nothing wrong if another round of discussion was held to evolve consensus.
However, Bhat was countered by BJP nominee in the Group, Sunil Sethi and Independent MLA from Udhampur, Pawan Gupta, who wanted immediate implementation of the GST in Jammu and Kashmir to usher in the era of `One Nation, One Tax’ regime. Sethi and Gupta said the State Government has already lost enough time and can’t lose more as only a day was left for the countrywide deadline to rollout the GST.
Sethi and Pawan also had tiff with Engineer Rashid, an Independent MLA when the latter raised the issue of beef at the Consultative Group meeting. They charged Rashid with diverting attention of the major issue.
CPM MLA MY Tarigami reiterated that implementation of GST will have wider legal and political ramifications. He suggested bringing a similar legislation or incorporating similar provisions in the State legislation in order to protect the Constitutional provision of Jammu and Kashmir. He warned that application of Constitutional Amendment 101 will not be reversible process, which meant once this Amendment is made applicable, there will be no chance of reversal of positions.
An official handout said:- Presenting the Government’s view, Finance Minister Dr Haseeb A Drabu said the Government will ensure adequate safeguards for protecting the special Constitutional position of Jammu and Kashmir as enshrined in Article 370 of the Indian Constitution.
“The way ahead to harmonize GST in the State could be by extension of only such limbs of the Constitutional Amendment 101 to the State which are already applicable to Jammu and Kashmir in one form or another with some other provisions of technical nature required for harmonization of our taxation structure with the new tax regime,” Dr Drabu said.
Regarding GST, Dr Drabu said it would be an integrated tax regime which would replace 16 taxes currently being levied by the Centre and the State Government. The taxes to be integrated under GST include Central Excise Duty, Duties of Excise, Additional Duties of Excise, Additional Duties of Customs, Special Additional Duties of Customs, Service Tax, State VAT, Central Sales Tax, Luxury Tax, Entry Tax in lieu Octroi, Entertainment Tax, Taxes of Advertisement, Purchase Tax, Taxes on Lotteries, Betting and Gambling and State Cess.
“In case the GST is not extended to the state, the businesses will be crippled as no trader from Jammu and Kashmir will be able to do business with their counterparts from other parts of the country,” Dr Drabu said and added that the consumer in J&K will be the worst hit due to double taxation.
He said in the absence of an alternative trading link, J&K is literally integrated with mainland Indian market. Entire requirements are imported from it and everything produced or manufactured in J&K is exported to the same market. “Twin taxation systems dissociated from each other will entail costs to business and to public finance system. Trading processes will be subjected to twin taxation systems making everything costly in J&K, a cost that ultimately the consumer shall have to bear,” he said and added that traders will have to pay more for managing twin systems and it could create a situation that J&K may not get buyers or sellers for its products.
There was a general consensus in the meeting that non-implementation of GST regime would trigger economic and financial chaos in the State with the inter-state trade vis-a-vis J&K taking a big hit.
The All Party Consultative Group had earlier met here on 24 June to discuss the issue.
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