SRINAGAR: The PDP-BJP coalition government in Jammu and Kashmir has decided to convene a special session of State Assembly from June 17 to discuss extending Goods and Services Tax (GST) to the State.
“The State cabinet, which met here under the chairmanship of Chief Minister Mehbooba Mufti, approved the draft Legislation on GST to be introduced in special session of the State Legislature. The draft legislation would lay a roadmap for the implementation of GST in the State,” State Finance Minister Haseeb Drabu told reporters, here after the cabinet meeting.
He said the State government will convene special session of J&K Assembly in Srinagar from June 17 for enactment of the GST in the State.
The extension of GST has three aspects -- constitutional, administrative and legal -- and all these aspects would be discussed in the assembly, he said.
Drabu said the Constitutional (Amendment) Act passed by the Parliament is not applicable to J&K and it has been left to the State Legislature to look into its various provisions and take decisions accordingly.
He said GST has been implemented in India under Constitution Amendment 101, which does not apply in Jammu and Kashmir.
The FM said only relevant provisions of the 101st Constitutional Amendment Act will be presented before the State Legislature for ratification.
Drabu said the version of GST brought by the state will neither infringe upon the special status of J&K under Article 370 of the Constitution nor compromise on special taxation powers enjoyed by it.
“We will have our own GST,” he said.
Drabu said while other states draw their power to tax under Article 246 of Indian constitution, J&K draws its power from section 5 of the J&K constitution.
Amid apprehensions that GST implementation in the State will erode Article 370, the FM said, “No constitutional amendments are required in the constitution of JK. It (GST) envisages nothing on Article 370.”
The GST would be extended to the State for five years and there will be a review after five years, Drabu said adding, “We have retained the right to review the experiences gained from implementation of GST after the compensation period is over.”
Favouring implementation of GST in the State, the FM said, “If we don’t extend the GST to the State then we will have to pay double taxes”.
“No business in the State will be done by profitability as the businessmen will have to bear two taxes,” he said.
The FM said out of three components of GST, two of them IGST and CGST have already been existing and remain applied to the State in the form of CST and Central Excise Tax.
For replacement of VAT with SGST, the government has drafted its own legislation which will be presented before the State legislature for approval.
According to Drabu, GST will benefit J&K as the new tax law is a consumption tax and State is a consumer state.
He said according to his estimates, the state will gain Rs 1500 crore to Rs 1600 crore in tax collections in addition to the devolution from the Centre.
He said under GST there will be no tax exemptions.
“But for Jammu and Kashmir and North East, there will be exemption in form of reimbursement,” added Drabu.
The business community in Valley is opposed to implementation of GST saying it would erode Article 370.