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Non-implementation of GST would lead to financial chaos in J&K: Finance Minister Drabu

Non-implementation of GST

ANI  |  fiscal autonomy Srinagar [India] 

Jammu And KashmirMinister of FinanceHaseeb A Drabu today said the state Governmentwill factor in constitutional, legislative, administrative and institutional issues distinct to the state, while implementing the Goods and Services Tax(GST) Bill in the State.

"Apart from safeguarding the special constitutional position of Jammu and Kashmir, we will also factor in administrative, legislative and other safeguards under the new Taxregime," Drabu told the media here today.testing.. we are here....

Drabu said the Governmenthas been discussing the new Taxregime at various levels to build broader consensus before bringing Jammu And Kashmirunder the ambit of Gstregime.

He explained in detail the benefits of the new Taxregime for which all the states except Jammu Kashmir have given nod and would be applied from July 1, adding that the biggest beneficiaries of this Taxregime would be the consumer, and the consumer states will be benefitted the most, instead of manufacturing states getting the cream under Sales Taxand VAT regimes.

Drabu termed apprehensions regarding Gstas false. He said a false perception is being created among people regarding the new Taxregime. "There is no such thing of compromise on existing position. It is written in Agenda of Alliance as well that there would be no compromise in exiting constitutional position," he said.

"Our intentions are clear. Unfortunately a completely wrong perception has been created by vested interests among the people about Gst Let me make it amply clear that we will ensure adequate safeguards for the State's fiscal autonomy while implementing GST," Drabu said.

The FinanceMinister said Jammu And Kashmirhas the most empowered legislative assembly which has residuary powers. "The harmonization that has happened in the GstCouncil over the years made me comfortable with the evolving system, despite my initial opposition to it," he said and added that, as he has maintained earlier also, GstCouncil is the symbol of real federal structure in the country where the powers to decide on taxes have been vested with the State Governments.

"When I today support it (GST), I support it because it has enough flexibility. For instance the biggest flexibility is the first time constitution amendment to the Indian constitution specifically mentions that this is not applicable to J&K, that itself shows the respect shown by the Parliament of India and Governmentof India for the special position of J&K," he said.

Drabu said Jammu And Kashmiris going through tough times over the last three decades and it is for the first time that a Constitutional Amendment will be discussed at various levels to remove any misconceptions. He said ironically 46 such amendments have been extended to the state since 1947 without even being discussed at any level.

"We are going through very difficult times. The situation is fragile and we don't want social chaos which ultimately impacts our economy. Under the new Taxregime, our powers to levy Taxremain unchanged," he said.

The FinanceMinister said the Governmenthas already convened two All Party Meetings on the issue and the third such meeting is being convened here tomorrow where threadbare discussions will be held and everyone will be taken on board.

"The Gstchanges the way one functioning in terms of compliance and collection of taxes. It is a major policy shift that will empower the consumer and there will be some hiccups for three to four months. But it will stabilize the system ultimately, making it more efficient and people-friendly," Dr Drabu said.

"The aim of the Gstis that the businesses must grow and become clean and superior. Due to new Taxregime, stunted business will get an impetus. If the law is not extended to the state, no trader will be able to get goods from outside because they don't have Gstnumber and neither can we export," he said and added non-implementation of Gstwould lead to complete chaos with traders and businessmen being hit the worst and ultimately it would lead to acute scarcity of consumer goods in the State.

He said in absence of an alternative trading links, Jammu And Kashmiris literally integrated with mainland Indian market. Entire requirements are imported from various parts of the country and everything produced or manufactured in J&K is exported to the same market.

"Twin taxation systems dissociated from each other will entail huge costs to business and to public Financesystem," he said and added that trading processes will be subjected to twin taxation systems making everything costly in J&K, a cost that ultimately the consumer shall have to bear. He said traders will have to pay more for managing twin systems and it could create a situation that J&K may not get buyers or sellers.

Allaying the fears of traders, the FinanceMinister said the incentives offered by the State and Central Governmenton various industries in Jammu And Kashmirwill continue. "The State as well as the Central Governmentwill continue to provide exemptions, factoring in all the incentives," he said.

Earlier today, FinanceMinister Arun Jaitley said that all decisions in connection with the GstBill were taken after building consensus with states and political parties.

"Jammu And Kashmiris also trying to pass the bill, I hope that they are able to do it soon. All the regulations in the regard have been made unanimously. Now that everything has been done with consensus then I hope that all the states, and political parties and politicos will participate in this. Even the date of the roll out was decided by consensus," he added.

Gstis India's biggest and most ambitious Taxreform that is being rolled out in hope that it will shore up Taxrevenues, cool inflation and accelerate growth.

Gstwill be rolled out on June 30 midnight.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, June 28 2017. 22:42 IST