Sanjeev Pargal
JAMMU, June 26: With just four days left for rollout of ‘One Nation, One Tax’ regime in the country in the form of Goods and Services Tax (GST) and Jammu and Kashmir being the only State not to endorse the new tax regime, Union Finance Minister Arun Jaitley today shot off a letter to Chief Minister Mehbooba Mufti seeking implementation of the GST as the State would suffer if implementation of the tax was delayed beyond July 1.
“All States and Union Territories have endorsed the new tax structure except Jammu and Kashmir. There are only four days left for implementation of the GST. It’s time for the State to endorse the tax and save itself from possible double taxation and loss of other benefits,’’ Jaitley said in his letter to the Chief Minister.
The Central Government is holding massive function on the intervening night of June 30 and July 1 in the Parliament to roll out the GST countrywide. President Pranab Mukherjee, Vice President Dr Hamid Ansari, Prime Minister Narendra Modi, two former Prime Ministers Dr Manmohan Singh and HD Deve Gowda and Finance Minister Arun Jaitley among others would join the function.
Meanwhile, sources here told the Excelsior that the State Government after going into all pros and cons was mulling the option of issuance of Ordinance to implement the GST from July 1 at par with country to avoid what could be “economic crisis’’ in the State if the new tax structure was not implemented. As very few days were left for revival of Legislature session, which has been adjourned sine die, the Government after approval of the Cabinet could approach the Governor to issue the Ordinance and implement GST in the State. Once the Ordinance is issued, the Government will get six months time to get it approved from the Legislature.
Sources said, in his letter to the Chief Minister, Arun Jaitley has mentioned series of adverse impacts of non-implementation of GST on the people, traders and even the State Government.
The letter said there could be general increase in prices of all goods being purchased from other States by the business and traders as well as the common man. At the same time, the prices of goods being sold to other States from Jammu and Kashmir, could also surge, thus, impacting local industry of Jammu and Kashmir.
Union Finance Minister Arun Jaitley today asked Jammu and Kashmir to roll out GST from July 1 as failure to implement it will lead to “adverse impact” of price rise and put local industry at a disadvantage.
In a letter to Chief Minister Mehbooba Mufti, Jaitley said that the State has actively participated in the GST deliberations and should join the nation-wide wide roll out of Goods and Services Tax from July 1.
All States, except Jammu and Kashmir, have already cleared the State GST (SGST) Bill, and are ready for embracing the new tax regime.
“As Integrated GST will be levied on all inter-state supplies of goods and services, credit for goods purchased in one State can be claimed in the State where it is sold. If the State of Jammu and Kashmir does not join GST on July 1, 2017, for all purchases made by the State from other States after July 1, the dealer shall not be able to take credit of this GST which shall get embedded into the price of purchased good or service, leading to cascading of tax and increase in price of the said good or service for the final consumers in J&K,” Jaitley said in his letter to the Chief Minister.
Similarly, the Finance Minister wrote, “in case of goods or services sold from Jammu and Kashmir to other States, the buyer will not be able to take credit of the local taxes paid., which shall put the trade and industry in Jammu and Kashmir on competitive disadvantage.
Reminding the Chief Minister that Jammu and Kashmir had actively participated in all GST Council meetings and even hosted 14th GST Council meeting in Srinagar on May 18 and 19, Jaitley urged the Chief Minister to take all necessary steps to introduce GST in the State on July 1, as any delay “would create a disadvantage for both, the consumers and the industry” of the State in the intervening period.
The Finance Minister has pointed out that Jammu and Kashmir had meaningfully contributed to framing of the various laws and rules for GST and during 14th meeting of the Council, held in Srinagar, rates of over 1,200 goods and 500 services were decided.
In his letter, Jaitley urged the Chief Minister to send the concurrence of the State on the GST Constitutional Amendment Act, 2016, for the approval of the President.
As per Article 370 of the Constitution, amendments made in Constitution of India are applicable to Jammu and Kashmir with the concurrence of the State Government and approval of the President.
The State Government had called Special Session of the Legislature from June 17-20 for debate on the GST followed by its approval. Prior to the Session, it had called an All Party Meeting on June 13 to evolve consensus, which eluded with some of the Opposition parties opposing implementation of the GST without safeguards of Special Provisions of the Constitution applicable to Jammu and Kashmir.
The Session was adjourned sine die within couple of hours on June 17 without even tabling of the GST bill.
The Government also held Consultative Group meeting on June 24 to evolve fresh consensus on the GST but main Opposition parties, National Conference and Congress abstained from it.
The BJP has already asked the Government to bring out an Ordinance on the GST and ensure its implementation by July 1.
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