Mehbooba buys time for GST rollout

Days after Union Finance Minister Arun Jaitley wrote to Chief Minister Mehbooba Mufti to roll out Goods and Service Act in Jammu and Kashmir, Minister of Finance Haseeb A Drabu said the government will factor in Constitutional, legislative, administrative and institutional issues distinct to J&K while implementing GST in the State.

"Apart from safeguarding the special Constitutional position of Jammu and Kashmir, we will also factor in administrative, legislative and other safeguards under the new tax regime," Drabu told reporters.

The Minister said the government has been discussing the new tax regime at various levels to build broader consensus before bringing J&K under the ambit of GST regime.

"The biggest beneficiaries of this tax regime would be the consumer, and the consumer states will be benefitted the most, instead of manufacturing states getting the cream under Sales Tax and VAT regimes," he said.

Drabu said a false perception is being created among people regarding the new tax regime. "It is written in Agenda of Alliance as well that there would be no compromise in exiting Constitutional position. Our intentions are clear. Unfortunately a completely wrong perception has been created by vested interests among the people about GST. Let me make it amply clear that we will ensure adequate safeguards for the State's fiscal autonomy while implementing GST," Drabu said.

He said J&K has the most empowered legislative assembly which has residuary powers. "When I today support it (GST), I support it because it has enough flexibility. For instance, the first-time amendment to the Constitution specifically mentions that this is not applicable to J&K, which is ample proof of the respect the Parliament and Government of India have for the special position of J&K," he said.

Drabu said J&K is going through tough times over the last three decades and it is for the first time that a Constitutional Amendment will be discussed at various levels to remove any misconceptions. He said ironically 46 such amendments have been extended to the state since 1947 without even being discussed at any level.

"We are going through very difficult times. The situation is fragile and we don't want social chaos which ultimately impacts our economy. Under the new tax regime, our powers to levy tax remain unchanged," he said.

Drabu said the aim of the GST is that the businesses must grow and become clean and superior. "Non-implementation of GST would lead to complete chaos with traders and businessmen being hit the worst and ultimately it would lead to acute scarcity of consumer goods in the State," he said.

Allaying the fears of traders, the Finance Minister said the incentives offered by the State and Centre on various industries in J&K will continue. "The state as well as the Central Government will continue to provide exemptions, factoring in all the incentives," he said.

...& ANALYSIS

• GST is the first major test of Jammu & Kashmir Chief Minister Mehbooba Mufti to prove her critics wrong.
   
• In the absence of GST, the state may descend into chaos, given that J&K is a consumer state.
   
• Mehbooba government has to strike a balance to protect special status as well as protect the interests of people at large.