The Jammu and Kashmir government, in which BJP is a partner, on Wednesday indicated that it may not implement the Goods and Services Tax (GST) regime being pushed by the central NDA government, saying it will compromise the state's special position.
"Jammu and Kashmir is unlikely to implement GST regime as it compromises its special position.... J&K is the only state that has the authority to legislate on all taxes and this will go with the new GST regime," state's Finance Minister Haseeb Drabu said. Drabu, who belongs to PDP, was speaking at a function at Kashmir University on current fiscal's Economic Survey by Chief Economic Advisor Arvind Subramanian.
The Centre plans to roll out the GST regime of indirect taxes by April 1, 2016. The Constitution Amendment Bill on GST, being pushed by the Narendra Modi government, was cleared by Lok Sabha during the just-concluded Budget session but it failed to go through Rajya Sabha due to resistance by opposition parties. The bill has since been referred to a Rajya Sabha Select Committee.
Though Drabu described GST as an "outstanding and efficient system", he said, "Positive impact of the 14th Finance Commission award is being offset by various measures including, for instance, the new GST regime which will limit the scope of any intervention by the states because GST will uniform tariff structure."
Drabu said while radical restructuring of economic policy that paved way for abolishing of Planning Commission has been a key intervention so far, there is no follow up. "States are in chaos about whether they should have a Plan or not. The 14th Finance Commission has changed fiscal federal system in India (but) there is no corresponding follow up about how this will work," he said.
