J&K wants protection of its special taxation powers under GST

Citing its unique Constitutional position, Jammu and Kashmir has asked the Centre to protect the state's special taxation powers while rolling out the Goods and Services Tax (GST).
Giving this information to the Assembly, Finance Minister Haseeb Drabu today said the draft GST bill circulated by the Centre has not incorporated any safeguards to protect J&K's special taxation powers.
"I have made a case for safeguards being put in place before the proposed legislation and I have been assured by the Union Finance Minister (Arun Jaitley) that it will be done," he said.
His comments came at a time when the Centre is keenly pushing the bill on GST which will reform the taxation system. The bill is currently stuck in Rajya Sabha because of resistance by main opposition Congress.

Drabu said before extending GST to Jammu and Kashmir, the bill will be brought before the state Legislature for ratification and modification, if required.
"J&K is the only state in the country with the powers to tax services... We have time and again taken up the matter of our special Constitutional position within the Union with the Empowered Committee of the Finance Ministers.

"In the recent meeting of the Empowered Committee at Kolkata, I called for constituting a sub-group of the Empowered Committee to take care of J&K's concerns on GST, given the special power to tax that J&K enjoys," he said.

He said the position of the state government over the last 14 years on GST Bill has been that it should protect the special Constitutional position of Jammu and Kashmir.
Targeting the previous National Conference government, Drabu said, "my predecessor, who despite being the Chairman of the Empowered Committee for three years, didn't present the state's views to the forum on how to protect the state's special status, except saying that it should be protected."
He said "no modalities" had been suggested by the previous state government. "We are now working on these. It is we who have to propose to the Empowered Committee how to do it and not the other way round," the Finance Minister said.

On the New Industrial Policy which is being opposed by various parties and separatists, Drabu said the changes to the policy announced in the Budget will be notified after it is passed by the House.
"Nobody should have any misconception that there is any threat to J&K's special status from the New Industrial Policy. It has been reiterated both in the Governors Address and the Budget speech that all policies, industrial and others, will be in line with the special status of the state," Drabu said.
He said the New Industrial Policy will come under holistic review once the GST regime comes into force.

"The present Industrial Policy is also for just a few months. If the GST regime is implemented, there would be sweeping changes in taxation and other matters pertaining to the industry especially in the area of exemptions and incentives," he said.