New Delhi: The Lok Sabha on Wednesday passed two bills extending Central GST and Integrated GST to Jammu and Kashmir, with Finance Minister Arun Jaitley saying the step will ensure greater economic integration of the state with rest of the country. He asserted that special status of Jammu and Kashmir was “never meant to create economic impediment” as he maintained that the GST is in the larger interest of traders and consumers of Jammu and Kashmir. 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 passed by the House by a voice vote 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, 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.
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.
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.
“Given the sensitivity of the J&K region, you should have been better prepared before introducing the tax regime,” he said, adding the apprehension of people of the state should be allayed by assuring that Article 370 giving them special status as well as fiscal autonomy would not be tampered with.