J&K: Opposition, industry bodies oppose PDP-BJP support for implementation of GST

Srinagar: A new political tussle is brewing between the ruling PDP-BJP government and the opposition party in Jammu and Kashmir. The ruling government is adamant to make the Goods and Services Tax (GST) applicable to the State but the opposition has vowed to fight it out on the premise that it would not only weaken Jammu and Kashmir’s special status guaranteed under Article 370 of the Indian Constitution but also cause “irreparable financial losses”.

The separatists, on the other hand, have accused the State’s Finance Minister, Haseeb A Drabu, of “showing loyalty to Nagpur” by seeking to implement the RSS agenda on Jammu and Kashmir. The Kashmir Inc has called for a one-day general strike in the Valley and sit-in demonstration outside Civil Secretariat in Srinagar on Saturday.

National Conference (NC), the main opposition party, had earlier this month accused the PDP-BJP government of seeking to implement the GST regime in the State “in a hush-hush manner to please the powers that be in New Delhi and thereby, bartering the interests of the State and its people to remain in power”.

It said Drabu “who today is the strongest votary of GST implementation in Jammu and Kashmir, is on record having said ‘Come GST and neither the State Legislature nor the State Cabinet will have a say on J&K Taxation’”. It asked him to come clean on the issue and “not hoodwink the people of the State”.

A special session of the State Legislature will be held in Jammu and Kashmir on June 17 to debate the draft legislation on the GST approved by the State Cabinet which met earlier this month.

According to Drabu, the bicameral House will deliberate on “some specific issues” related to the GST in the wake of apprehensions being raised over the implementation of the new tax regime in the State. The 101 Amendment Act of the Indian Constitution, under which the GST would be applicable to all States, does not apply to Jammu and Kashmir as of now.

He said, “It has been left to the State Legislature to look into its various provisions and take decisions accordingly. We have prepared our own draft bill that was approved by the cabinet and the amendment will apply in the modified form. I assure you the move would neither infringe upon Article 370 nor compromise on the power to impose taxes that the State draws from Section 5 of its Constitution.”

But the opposition is not satisfied with this argument. The NC had asked for convening an all party meet to discuss the issue. Apparently, no consensus could be arrived when it was held earlier week. “We tried to get a sense of the stand taken by the government but, unfortunately, we realised, it is in deep confusion and does not know what to do and how to go about it,” said senior NC leader and former finance minister Abdul Rahim Rather.

The NC has now vowed not to allow the application of the 101 Constitutional Amendment Act to the State at any cost. “We do not oppose the new taxation regime but we will not allow the implementation of the 101st Amendment of the Constitution of India in its original form to J&K come what may,” said Rather.

He recalled that the previous NC government had in 2012 prepared a blueprint for the implementation of the GST in consultation with tax experts of the Supreme Court and the state government.

According to that blueprint, the State would impose and collect tax and give a share of it to the government of India.

He ridiculed the government over its plea that the GST, if implemented in the State in present form, will not dilute Article 370 further. “They are misleading people on the issue. Making the 101 Constitutional Amendment Act applicable to the State would mean a law passed by the Parliament would be extended to the State on the subject, which would automatically diminish the powers of the State,” Rather said.

Elaborating, Rather said, “Our residual powers to levy taxes will go to the Parliament which will take over the role of auditing under tax administration and the State may have only a limited role to play in it”.

He also questioned the wisdom behind the State Cabinet’s approving the GST draft bill. “Why to approve the bill if you have not decided whether to implement the law or not? You are only making it evident that you have made up your mind to implement the GST and now you are just creating a drama.”

The Congress too has pledged not to allow any compromise on Jammu and Kashmir’s financial autonomy and special status. Opposing the holding of special session of the State Legislature, it asked for making the GST draft public first.

“We also attended the all-party meet but made it clear that there must not be any session of the State Legislature till the draft is made public,” senior party leader Ghulam Nabi Monga was quoted as saying in a newspaper interview. He asked, “Why are they keeping it under wraps?”

Kashmir Chamber of Commerce and Industry (KCCI) and other trade bodies have cautioned that implementing the GST in Jammu and Kashmir would be “a direct attack” on the State’s special status. In a statement issued, KCCI president Mushtaq Ahmed Wani said, “The KCCI opposes extension and implementation of GST in Jammu and Kashmir as it would deprive the State of its financial autonomy and its powers to legislate on financial matters”.

He added that extension of such laws to Jammu and Kashmir tantamount to “direct infringement with the special status of the State guaranteed and vowed to be maintained under Article 370 of the Constitution of India.”

He also said, “We have, at our meetings with Chief Minister, Mehbooba Mufti, and Finance Minister Drabu, made it clear that the GST shall in no way be acceptable as it tantamount to erosion of special status of Jammu and Kashmir.”

Associated Chamber of Commerce & Industries-Kashmir (CCIK), while reacting to the argument of the government that central laws have been extended to Jammu and Kashmir 46 times earlier and therefore, where is the harm if it happens 47th time, said, “It is nothing but to justify one wrong with another. We are unable to buy this.”

A statement issued by CCIK said, “It is our considered opinion that GST goes against the letter and spirit of the autonomy of the State. It will erode J&K’s say on taxation, be it the legislature or the cabinet. The GST Council can shoot down any proposal from the State on Goods and Services and this is going to happen to Jammu and Kashmir. This will turn the financial autonomy of the state into financial dependence. We are going to lose less financially but much more politically.”

Kashmir Traders and Manufacturers Federation (KTMF) has called for Kashmir bandh’ on Saturday while the Kashmir Economic Alliance (KEA) said it would hold ‘secretariat gherao’ on the same day.