State govt yet to take call on GST

Sumit Hakhoo

Tribune News Service

Jammu, December 1

The debate on the goods and services tax (GST) is raging across the country, but there is utter confusion in Jammu and Kashmir as the PDP-BJP government has not even done preliminary work on the subject. It is yet to figure out how the state will deal with the pan-India single tax system.

Sources said Finance Minister Haseeb Drabu had hinted that J&K might not implement GST due to special taxation powers of the state owing to its special status, while the BJP was finding itself sidelined over the issue, leading to resentment within the party against the PDP leadership.

A senior official from the Finance Department claimed that J&K was yet to decide its official position on the GST and there had been no discussion on it between the coalition partners.

“The state’s special status means that no Central law can be implemented directly in J&K but when the uniform tax regime is introduced, it will change the way goods and services flow across the country. We have not prepared any framework and it will lead to confusion in future, hitting the economy hard. J&K cannot remain sidelined for long in today’s market-driven economy when fiscal integration is the only way to improve life of people”, the official said.

By virtue of its separate Sales Tax Act, J&K has the power to tax both goods and services. All other states in India have the authority to tax only goods. Under the GST regime, J&K will have to surrender the authority to tax goods and services granted to it.

Drabu was not available for comment while Minister of Statefor Finance Pawan Gupta said: “It will be better if you talk to Mr Drabu. He will be in a better position to give information on the issue. But the alliance partners should discuss the GST as it will have a positive impact on business and economy of the state. So far, we have not held any meeting,” said Pawan Gupta.