Top

Lok Sabha clears 2 bills extending GST to Jammu and Kashmir

The J&K Assembly then passed the Jammu and Kashmir Goods and Services Tax Act, 2017 which came into force on July 8, 2017.

New Delhi: Two bills extending Central GST and Integrated GST to Jammu and Kashmir were passed by the Lok Sabha on Wednesday, with finance minister Arun Jaitley saying that it will ensure greater economic integration of the state with rest of the country.

He asserted that special status of J&K was “never meant to create economic impediment” as he maintained that the GST is in the larger interest of traders and consumers of the state.

The Central Goods and Services Tax (Extension to Jammu and Kashmir) Bill and the Integrated Goods and Services Tax (Extension to Jammu and Kashmir) Bill were passed by the Lower House through voice vote, and are aimed at giving effect to the formal amendments required in Central GST (CGST) and Integrated GST (IGST) Acts by removing the exemption that was carved out for J&K.

Replying to a debate on the bills, Mr Jaitley said it was a positive step that Jammu and Kashmir has been integrated with GST and the dream of one tax regime is now met. He hit out at the Congress for its reported claim that GST would infringe upon the special status of J&K.

The finance minister said a national party such as the Congress should not have got itself entangled by taking such a stand which is the “argument of the separatists”.

He asserted that the “special status (was) never meant to create economic impediment” for the state whose government, Assembly and people he “complimented” for the roll out of the new tax regime. “If they (J&K) didn’t integrate, then the traders would not have got input credit and the tax on final products would have been higher... That would have made products costlier and consumers would have to pay more,” the minister said.

“J&K is a consumer state and GST being a destination-based tax, the revenues of the state would increase,” he said.

He said if GST was not put in place in J&K, then customers would prefer to buy products like cars and refrigerators from outside the state, thus causing economic loss to traders and customers of the state.

The CGST (Extension to Jammu and Kashmir) Bill, 2017 provides for levy of the GST on goods sold and services rendered in the state while the IGST (Extension to Jammu and Kashmir) Bill, 2017 seeks to levy the tax on inter-state movement of goods.

The GST, which replaced more than a dozen central and state levies, came into effect from July 1 all over the country except J&K where the Assembly passed a resolution adopting the constitutional amendment only on July 5.

The J&K Assembly then passed the Jammu and Kashmir Goods and Services Tax Act, 2017 which came into force on July 8, 2017.

Participating in the discussion on the bills, Congress MP Adhir Ranjan Chowdhury asked the Centre to ponder over why it is taking recourse
to Ordinance for every legislation.

He said while the UPA government was accused of policy paralysis, the present government is undergoing “policy dialysis” and hence there was “economic stasis”.

“When we have access to Parliament, we should not frequently resort to Ordinance,” he said, adding the government had failed to impress upon the J&K government to implement GST from July 1.

Mr Chowdhury said GST, as implemented, cannot be called ‘one nation, one tax’ as nearly 50 per cent of the GDP remains out of its ambit.

Another Congress MP Shashi Tharoor said that extending GST to J&K has “serious impact” as it alters the taxation power of the state and by “impinging” on the state’s right the Centre is violating the Constitution.

“J&K must be approached with sensitivity, but no sensitivity was shown as the bill was passed in assembly when Opposition was not present... It could signal future problems,” he said.

He said the state has been dealing with conflict and the government should not do anything which impacts its stability.

Next Story