‘If GST is passed in the present form, we will have to shut shop’

KCCI president, Mushtaq Ahmad Wani (2nd from left) addressing a presser in Srinagar in early 2016 along with JCCI president, Rakesh Gupta. (File Photo)

J&K’s financial autonomy will be surrendered to the GST council: KCCI  

Srinagar: If the Goods and Services Tax (GST) bill is passed in the current form in Jammu and Kashmir, traders will have to shut shop, believes Iqbal Masudi, member of the Carpet Export Promotion Council (CEPC).

On the other hand, the Kashmir Chamber of Commerce and Industry (KCCI) – Jammu and Kashmir’s oldest trade body – observed that the bill, if passed, will surrender financial autonomy of Jammu and Kashmir, which as of now lies with the state legislative assembly, to the GST council.

Masudi asked that when the profit margin in the sector is only 4 to 5 percent how does the government expect the traders to pay around 18 percent tax.

“This is preposterous and not viable at all. The whole world knows that we are struggling as we are facing so many problems financially as well as politically, so our government should have taken up this issue beforehand,” Masudi added. He called the approach of PDP-BJP government as “absolutely callous”.

Iqbal Masudi (left)

As the state of J&K enjoys “special status” in the Indian constitution through article 370, opposition parties have raised objections with regard to implementation of the GST in state. However, the PDP-BJP government has claimed that the “special status won’t be diluted in any case”.

Governor N N Vohra has called a special session on 17 June where GST Bill will be debated and is expected to be passed as the coalition government has more than required numbers in the lower house of the state legislature.

Masudi also pointed out that there is a huge production of carpets in Badaun in Uttar Pradesh which will get affected too, however, due to the UP government’s support they are soon going to take up the issue with the Union Finance Minister Arun Jaitey.

“They in Badaun are already facing crisis. And they are now going to take up the issue with the government. At least they have that much support that they are planning to meet the Finance Minister. We on the other hand are helpless,” lamented Masudi.

He added, “Our government should also have taken up this issue with the Union government through the empowered committee of finance ministers. They should have had this sensibility that thousands of people related to the sector will be affected if the bill is passed.”

Masudi also informed that the government is coming up with this argument that there is a ‘refund’ option in the GST.

“But that is only for the exporters. What about the local traders. Who will take care of them? They earn on a margin of 4 to 5 percent and how are they going to pay such a huge tax? By selling their household,” he said.

The CEPC member admitted that they were under an impression that there would be some sort of a wavier for the carpet industry.

“But nothing of that sort has happened. This is a shock for us,”Masudi said.

‘Not ready to surrender our financial autonomy’

President of the KCCI, Mushtaq Ahmad Wani fears that the J&K state government led by Mehbooba Mufti will surrender the financial autonomy to the GST council if the bill is “Okayed in the present from”.

“The main concern is that the financial autonomy which rests with the state legislature will be surrendered to the GST Council as they will fix the rates then. In that council, J&K Government only have one vote,” Wani said.

He added, “Earlier, we used to go meet J&K finance minister before the state budget session and discuss problems related to trade. Sometimes the taxes were waived off and sometimes not. But the thing is that the power lies with the state legislative assembly which will no longer be there if GST bill is passed.”

Representation Picture

Wani stressed on that fact that “an important part of the Article 370 will be lost if the bill is passed in the current form”.

He also expressed concern for the small scale units which “won’t survive” under GST.

“Small scale units will not survive under GST. There is no exemption or remissions for them in the bill. I don’t know how they will pay such huge taxes. I don’t know what the government has planned for them,” Wani said.

The KCCI chief also pointed out that the government wants them to register under the act before the 16th of this month. He, however asks, “Under which act? It hasn’t been passed yet. The government is saying that they would bring in the GST here in accordance with the special status. If that is the case, then the registration should start after the act is brought in.”

Wani also said that there is a need to educate people regarding the act.

“There are five returns in a month. Earlier we used to file quarterly returns. There is a need for education regarding the act, “Wani said.

KCCI has been meeting the government regarding the issue.

“We are going to meet them again today. Let’s see what will happen. But we are not ready to surrender our financial autonomy,” Wani asserted.

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