Srinagar: The Goods and Services Tax (GST) at the time of my predecessor is “all-together” different from what it is now, said J&K Finance Minister, Dr Haseeb A Drabu on Wednesday.
The government of India is set to overhaul its tax collecting mechanism with the roll out of GST from July Ist this year. The J&K Government is part of the new regime and the law is scheduled to go through J&K Legislature for final stamp.
The work on GST – a unified tax regime across length and breadth of Indian Union – was initiated way back under UPA government in New Delhi and it was the then Finance Minister, Ab Rahim Rather, in Omar Abdullah led NC-Congress coalition government who represented JK government in GST meetings.
However, the economist turned pro-India politician, Dr Haseeb A Drabu, would criticise the GST implemenation then in his weekly columns which appeared in the Greater Kashmir.
Answering a question on Wednesday as how he was now ready to go with GST regime, Dr Drabu replied, “this will be the first full federalism Indian union will experience.”
“I was not against the GST per se but since I have taken over (as FinMin of J&K), we have affected huge changes in the GST draft bill and the GST we are going to implement in state is ‘all-together’ different from what was being dicussed during my predecssor’s regime,” he claimed.
Dr Drabu joined Peoples Democratic Party (PDP) in 2014 before J&K Legislative Assembly elections and won from Rajpora assembly segment.
He went on to become Finance Minister of J&K after PDP joined hands with right wing BJP after drafting Agenda of Alliance (AoA).
He said that the government of India has made it clear that the J&K Government is “capable of bringing their own GST law”.
He was referring to severe criticism the GST law has invited from various quarters in state with observers alleging that it “was yet another compromise” with the ‘special’ status of J&K.
“The GST regime will have no impact with the special status of J&K,” he asserted.
“Our government is bringing the GST draft bill in a special session of J&K Legislative Assembly where it will be discussed before being passed,” he said adding that the session of the J&K Legislature will be called from 17 of this month.
Expected to generate noisier debate inside the house, however, the bill will go through a safe passage as the Mehbooba Mufti led coalition government has more than required numbers to pass it.
There are three issues – Consitutional, Legislative and Administrative – concerning the GST implementation, Dr Drabu informed.
“The first one: Constitutional does not apply and it is under the legislative that we shall debate whether GST should be implemented,” he informed.
“We will be bringing our own bill in the state legislature,” he said. “There is no amendment needed in the constitution of J&K to bring this law.”
He said that GST is modified form of the tax laws already in vogue in J&K or across India.
“There are three components of the new tax regime: GST, IGST and CGST,” he said. “Last two have already been existing and remained applied to the State of Jammu and Kashmir in the form of CST and Central Excise Tax.”
“Besides,” he added, “we have decided to review the implementation of GST experience after five years (of its impementation),” he informed.
Because J&K is a consumer state, Dr Drabu said, our state kitty will be benefitted by over Rs 1500 crore annually.
However, he added, “if we oppose and do not implement such a unifying law, the businesses in J&K will face major hiccups.”
“There will be no business at all,” he said, “because our economy will be completely isolated.” “It is not about the government but the businesses will be shattered.”
More so, he informed, those coming uder the tax regime will have to pay two taxes instead of one single tax.
Dr Drabu said that only the relevant provisions of the 101st Constitutional Amendment Act will be presented before the State Legislature for ratification.
“The implementation of GST in no way infringes upon Article 370 or the Constitution of the State of Jammu and Kashmir,” he said. “Section 5 of the Constitution of Jammu and Kashmir will remain untouched from where the State Government derives the financial autonomy and power of taxing.”
He said that the new law makes the State Government free to levy any additional tax or new taxes on such commodities which doesn’t come under the preview of GST.
When asked whether the traders – who have warned of agitation – will be taken on board before GST is a reality, Dr Drabu said, “I have taken all traders on board since December 2016. We have given them a formal format.”