Protest against GST in Kashmir. In Jammu and Kashmir — the only state in the country that is yet to approve implementation of the Goods and Services Tax (GST) regime — opinion is sharply divided between the Kashmir Valley and the Jammu region over the issue.
Traders, industrialists and businessmen in the Jammu region have unequivocally supported implementation of the GST to bring the state in line with the rest of the country.
Rakesh Gupta, President of the Jammu Chamber of Commerce and Industry (JCCI), has set for the state government the deadline till Tuesday to announce implementation of the new tax regime.
Speaking in Jammu, Gupta said: “We are for uniform taxation structure throughout the country to which Jammu and Kashmir cannot be an exception.
“We stand for implementation of the GST regime in the state. We are exercising restraint keeping the present law and order situation and the forthcoming Amarnath Yatra in view.”
He said that they were expecting a positive decision in Wednesday’s meeting of the all-party group set up to discuss the issue.
“We expect the opposition to come forward in a positive manner on the implementation of the new tax regime and not to walk out of the meeting as they did last time.
“At the same time, we expect the chief minister and the finance minister to show foresight and wisdom to carry everybody along while implementing the new tax rules,” he added.
The Valley’s representatives of the local chamber of commerce and industry have a diagonally opposite view to their counterparts in the Jammu region.
Mushtaq Ahmed Wani, president of the Kashmir Chamber of Commerce and Industry (KCCI) said: “We have said from day one that any new tax law that erodes the fiscal autonomy of the state would be opposed by us.
“The extension of Amendment 101 in its present form to Jammu and Kashmir would definitely erode the financial autonomy of the state as we would be surrendering our taxation powers to the GST Council.”
Muhammad Yasin Khan, president, Kashmir Economic Alliance (KEA), another prominent body of local businessmen, traders, transporters and industrialists, said: “Our basic contention is as to why should the state surrender any power given to us on account of the special status to the Centre.
“Surrendering the taxation powers to the GST Council would be a big erosion in the (financial) autonomy of the state.”
Opposition National Conference is of the view that since the implementation of the GST regime would erode the financial autonomy of the state, the party would not support the move in its present form.
Former state Finance Minister and senior National Conference leader Abdul Rahim Rather said that instead of getting its share of the taxes collected from the Centre, as envisaged under the GST regime, the state should have its own taxation system and collect taxes directly.
“Under our own taxation rules, we can collect taxes and give the Centre its share,” Rather argued.
A taxation expert requesting anonymity said: “If GST is not implemented in Jammu and Kashmir, we will lose Rs 1,800-Rs 1,900 crore annually which would otherwise devolve to the state as a share of taxes collected by the centre.
“The inter-state sales will now be governed by an integrated goods and services tax regime. This tax is mainly imposed to transfer the input tax credit from the producer state to the consumer state and this won’t be applicable to Jammu and Kashmir unless GST is extended here.”
In layman terms, this would mean the input tax credit would not go to the state, he explained.
“The overall impact of non-application of the GST to the state could cause disruption of inter-state sales between our state and the rest of the country.”
Union Finance Minister Arun Jaitley has also written to state Chief Minister Mehbooba Mufti to ensure that the state approved implementation of the GST before July 1 — the date for rolling out the new taxation regime in the rest of the country.
Nirmal Singh, senior BJP leader and Deputy Chief Minister has threatened to pull out of the ruling alliance if the GST is not made applicable to the state as in the rest of India.