Excelsior Correspondent
JAMMU, July 6: Union Finance Minister Arun Jaitley said today that Jammu and Kashmir Legislature nod to Goods and Services Tax (GST) yesterday has resulted into economic integration of the country, which was never there earlier during past 70 years despite political integration, which was completed after Jan Sangh veteran Shyama Prasad Mukherjee’s agitation, whose birth anniversary falls today.
Addressing a function in New Delhi in connection with birth anniversary of Mukherjee, Jaitley said J&K Chief Minister Mehbooba Mufti preferred welfare of the people of her State by deciding to adopt the GST and ignoring separatists’ voice not to implement the new tax structure.
He said after historic `andolan’ (agitation) by Shyama Prasad Mukherjee, the country was united politically but its economic integration took place after historic approval of J&K Legislature to the GST.
“It was a major decision when Jammu and Kashmir Legislature yesterday adopted the GST bill,” Jaitley said amidst thunderous applause from the crowd.
Recalling opposition to implementation of GST in Jammu and Kashmir by some separatists on the ground that it would financially integrate the State with India, the Union Finance Minister and BJP’s veteran leader said he wrote to Chief Minister Mehbooba Mufti that J&K is not a producing States as it has no factories and had to import majority of goods from outside the State.
“The separatists were running a propaganda that GST shouldn’t be implemented in J&K as it would lead to financial integration of the State with India,” he said, adding the Centre had to emphasize to the State that its people will lose out as they will pay double tax over instead of just one GST, making foods costlier in Jammu and Kashmir than the neighbouring States like Punjab.
“When a Jammu and Kashmir citizen gets cheaper car in Pathankot, why would he purchase it in Jammu?”, he asked and said he categorically told the Chief Minister that she should help citizens of her State by giving them benefits of GST, which other States were getting.
Jaitley said there was logic in the Centre’s stand on GST and finally it was not possible for Jammu and Kashmir Government to ignore the new tax regime.
“I wrote to Mehbooba Mufti saying that goods will become costlier (if you don’t implement GST). So, you have to choose the path of either going with the separatists or thinking about the welfare of the people of the Sate,” Jaitley said. Jaitley pointed out how the price of a commodity would have varied in Pathankot and J&K, if the latter decided not to implement GST.
Citing his meetings with traders and businessmen based in Jammu, Jaitley said that they had voiced concern that they may be at a disadvantage if the same product is sold at a cheaper price in Pathankot in Punjab which is just an hour away from the State.
“And the same argument was given by the State Government yesterday in the State Assembly,” he said.
The Finance Minister further said that in the last 70 years, this is the first time that the country had become economically integrated.
“…The J&K consumers also feel that they are integrated with India, and it is beneficial for us,” he said.
Being a consuming State, J&K would also benefit from GST and the revenue of the State will increase, he added.
In his letter to Mehbooba last month, Jaitley had asked her to implement GST in the State as failing to do so would lead to “adverse impact” of price rise and put local industry at a disadvantage.
Jaitley said the Centre took the States along and met the deadline for implementation of the GST. He added that the Centre has promised to all States that if they suffer losses for implementing the GST during first five years, the Centre would compensate them.
Jaitley said that the decision of the Jammu and Kashmir Legislature to pass the resolution to ratify GST is in the interest of the people of the State as it will make the goods and services available at cheaper rate at par with rest of the country.
Comparing GST with the unification of more than 500 princely States after the independence by Sardar Ballabh Patel, Jaitley said that for the first time India has become a unified market. He said it was not an easy task for the Central Government to get the Constitutional Amendment Bills passed unanimously.
Paying rich tributes to Shyama Prasad Mukherjee, Jaitley said he was the most veteran leader, thinker and patriot of post-independence.
“Whenever post-independence history will be written, Mukherjee will continue to be remembered as symbol of uniting the country.
Jaitley said the first move towards the landmark GST was made by the Atal Bihari Vajpayee Government 17 years back, and not the Congress.
The Vajpayee Government constituted a task force which in 2003 submitted a report saying Central and State levies should be merged or unified into a GST.
Jaitley said the Government changed in 2004 and the incoming Congress saw merit in the argument mooted in the report.
The then Finance Minister P Chidambaram in 2006 spoke of GST and set 2010 as deadline for rolling out the new indirect tax regime, he said, adding he could not implement the plan.
In 2011, the then Finance Minister Pranab Mukherjee, who is now the President, introduced a Constitutional Amendment to bring GST.
But the UPA could not get all States onboard because they could not resolve how to compensate losses to manufacturing States arising because of GST being a destination-based tax, he said.
Prime Minister Narendra Modi, he said, was clear from day one that India has to be unified economically and devised not just a compensation formula, which was put in the Constitution Amendment Bill, but also got all the 29 States and six Union Territories on board to agree to the new tax.
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