Both the houses of Jammu and Kashmir Assembly on Wednesday passed resolutions on Goods and Service Tax (GST) “under the ambit of Article 370” paving the way for the implementation of the new tax regime in the state.
The opposition and the traders had opposed the decision by the government to implement the GST on the pretext that it would dilute the autonomy of the state under the article 370 of India Constitution.
The resolutions were passed by the ruling PDP-BJP alliance that has a two-third majority in the assembly. The opposition NC and Congress and others opposed the move.
The resolution in the legislative assembly (lower house) was passed after Finance Minister Haseeb Drabu assured the house that implementing the GST in the state was within the ambit of Article 370.
He said adequate safeguards for protecting the special status of the state and Consolidated Fund and special taxation powers of the state are proposed to be incorporated in the Presidential Order for bringing the state under the ambit of the new tax regime.
“Under no circumstances will the state government amend the Section 5 of the Constitution of J&K, which gives it special taxation powers,'' Drabu said.
He said such a move will open a Pandora's box that will have implications on the special constitutional position of the state in the future.
He said the government was proposing that the Article 370 shall not be compromised in any way through the Presidential Order.
“The exclusive powers of the state to tax and the Consolidated Fund of J&K shall not be impaired. Article 370 should be protected and used for development of the state and for the empowerment of people,'' he said. ''Instead, it is being used as a tool to whip up political passions and draw political mileage.''
Expressing concern about declining trade in the state due to uncertainty over GST, Drabu said only 1,000 truckloads of goods crossed the Lakhanpur Toll Post on July 4, down by half compared to the corresponding period last year.
"The exports have also halved with only 150 truckloads of goods moving from J&K to other states. This is adversely impacting our trade and economy," Drabu said.
The minister said the government was not facing pressure from anywhere to extend the GST to Jammu and Kashmir. He said the resolution on GST is a statement of a principle.
Drabu said though no one in the House had any issue with GST per se, there might be differences with the modalities of applicability.
''That is why we want this law to be backed by the government, and legislative process to prevent any harm to the consumers and trade without compromising state’s special position," Drabu said.
Criticising the opposition's objections to the implementation of the GST, Drabu said the new indirect tax regime was the biggest democratisation of public funds in the world, and J&K, being a consumer state, would immensely benefit from it.
The lead opposition, the NC, said the resolution would erode the autonomy of the state and infringe on the state's fiscal autonomy.
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“Opposition fears were not allayed. Finance minister has failed to answer the questions raised during the debate,” said NC legislator Devinder Singh Rana.
