The opposition, separatists, and traders in Kashmir have strongly opposed the adoption of the new uniform Goods and Services Tax regime, which was deliberated in a two-part meeting in Srinagar on May 18 and 19, on the contention that it will dilute the special status of the state and compromise its financial autonomy.
The Kashmir Traders and Manufacturers Association (KTMF) has called a bandh on June 17 to protest the decision by the government to extend the new GST policy to Jammu and Kashmir and even threatened a 2008-like agitation against the move.
Opposition National Conference and Congress has asked the government not to rush with implementing the new tax regime as it would further infringe on the state's autonomy and strip it of powers to regulate taxes.
Senior NC leader and former finance minister of the state Abdul Rahim Rather said the extension of the 101st Amendment Act of Parliament to the state would cause irreparable political and financial loss to the state.
He said the NC-Congress government in 2012 had prepared a blueprint for the implementation of the GST in consultation with tax experts of the Supreme Court and the state government under which the state would impose and collect the tax and give a share of it to the government of India.
Rather said the government is in deep confusion. They don’t know what to do and how to go about it, he said.
About finance minister Haseeb Drabu’s assertion that GST will not erode J&K’s fiscal autonomy or dilute Article 370, Rather said Drabu had himself admitted in a newspaper article on August 15, 2013, that if GST is implemented in the state in the present form, then neither the state legislature nor the state cabinet, let alone the finance minister, would have any say to impose taxes or prevent hikes.
Then in a lecture at Kashmir University on May 22, 2015, Drabu had said that the state may not endorse the new GST as it will compromise special powers of the state to collect taxes and will be a major surrender of powers by the state to Centre, Rather said.
“He can’t be right both the times,” Rather said. Drabu, he said, has maintained that J&K would continue to have powers to collect taxes under Section 5 of the Constitution and the state would continue to enjoy power for revision of taxes and rates.
“But once the GST is implemented in present form, these powers will go to the Centre. To date, the Centre had the power to levy excise duty only. Through the 101st Amendment, you are handing over all powers to them including powers to tax sales and services,” Rather stressed.
He said in all-party meeting called by the government on May 13, even PDP leader Muzaffar Hussain Baig had agreed with the opposition that the GST policy will dilute the state's autonomy.
He said it is up to the people now to decide whether the finance minister is right about the claims made by him on tax revision and rate revision.
Congress too has slammed the government on the new GST policy. Senior leader and member legislative council Ghulam Nabi Monga said the party has made it clear that there must not be any Assembly session till the draft GST bill is made public.
“When the ruling party claims that there would be no compromise on fiscal autonomy, why doesn’t it make the draft GST bill public?” he asked.
Kashmir Traders and Manufacturers Federation (KTMF) has called for ‘Kashmir Bandh’ on Saturday while the Kashmir Economic Alliance (KEA) said it would go for ‘Secretariat Gherao’ on the same day to protest proposed implementation of GST in the state.
KTFM chairman Bashir Ahmad Rather said “all stakeholders” should observe a complete shutdown on Saturday to protest the implementation of GST “which is a direct attack on state’s special status”.
The separatists too have joined the anti-GST chorus. The joint resistance forum of comprising Syed Ali Geelani, Mirwaiz Umar Farooq, and Muhammad Yasin Malik have said the state authorities are hell-bent on harming the business community.
“A few state ministers are in league with authorities in Nagpur and are being lured to implement (the) GST in the state,” a joint statement issued by the leaders said.
