Srinagar, Jul 2 : Reiterating its resolve to oppose implementation of Goods and Services Tax (GST) in its current form as it ‘erodes financial and political autonomy’ of the state, main opposition National Conference (NC) said upward devolution of tax from Jammu and Kashmir to the Centre is difficult, but not impossible.
“NC will oppose the implementation of GST till safeguards are not made to the fiscal autonomy and special status of the State guaranteed under Article 370,” senior NC leader and former state finance minister Abdul Rahim Rather told reports at a press conference here this afternoon.
Rejecting Finance Minister Haseeb Drabu’s observation that constitutional changes will be required to implement upward devolution of tax, he said no change is required to be made in the state constitution, but two articles in the Indian Constitution needs to be amended. “The taxes which we (state) will collect — both state share and centre share — will go consolidated fund. In order to take our state share from that consolidated fund, we in any case have to make a law every year. So if we receive both state share and centre share in consolidated fund, we (government) will make a law every year and handover the centre’s share to it,” he said.
Mr Rathar said upward devolution of tax from Jammu and Kashmir to the Centre is difficult, but not impossible. He said there are ample examples of such models around the world, like Canada, where one of the four provinces of the country uses reverse devolution of taxes.
“The government needs to be open to ideas, but they have made up their mind to implement GST in its current form,” Mr Rathar, who is a former chairman of GST council, said.
Meanwhile, reacting sharply to Dr Drabu’s comment that GST will be rolled out in the state on July 6, Mr Rather said by this statement the finance minister has made a mockery out of state Legislature. “If the government has called a state Legislature to discuss GST, how can the finance minister say that it will be implemented on July 6 without discussing it in the House. It seems that the government has already made up its mind to impose the tax regime in the state in its current form,” he said.
Lashing out at the state government for failing to provide any roadmap that assures safeguards to fiscal autonomy and special status of the State after the implementation of GST, Mr Rather said NC will oppose the tax regime till it doesn’t affect the residual powers of the state.
Mr Rather warned that implementing GST in its current form will have negative ramification on the state both politically as financially.
He said the GST offers benefits to other states in terms of giving them rights to impose tax on services, but doesn’t offer anything substantial to J&K as it already imposes the tax under the state law.
“Other states have compromised and handed over the power of taxation to the Centre, but in return they will be able to impose tax on services. Earlier, the state used to impose tax only on goods and not on services. But, that was not the case with J&K, we use to impose tax on both services and goods under our own law,” he said.
On the contrarily, he said the state will have to handover the power to the Centre of implementing taxes. “Once the GST is implemented in J&K, the center will also impose tax on services in the state, which was exclusive right of the state government,” he added.
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