JK Has Issues With Applicability Of Proposed GST Law: Drabu


SRINAGAR, JUNE 16: Setting to rest all speculations regarding the industrial policy, Minister of Finance, Dr Haseeb Drabu today said the changes to the New Industrial Policy announced in the budget will be notified after the Budget is passed by the House.

The Finance Minister said an SRO will be issued to notify all the changes listed in the Budget speech, in particular for amendment of Section 2.11.2 of the industrial policy approved during the Governor's rule. Industrial associations and other stakeholders had expressed reservations about this particular section of the policy.

“Nobody should have any misconception that there is any threat to J&K’s special status by the New Industrial Policy. It has been reiterated both in the Governor’s address and the Budget speech that all policies, industrial and others, will be in line with the special status of the state,” Dr Drabu said while making a statement on the issue in the Legislative Assembly this morning.

The Minister quoted from the relevant paras of the Governor’s Address and the Budget speech for 2016-17, wherein it has been amply made clear that the implementation of the New Industrial Policy would be in tune with the existing administrative practices, regulatory norms and the constitutional provisions of the state constitution.

“The provision regarding non state subjects being allowed to develop new industrial estates has been put on hold and the changes in it will be notified as soon as the budget is passed,” he said, adding that any modifications in these clauses would be notified through an SRO after the ongoing Budget Session of the State

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, adding that the Government will have to review the Industrial Policy once again in such a scenario.

On Goods and Service Tax Bill

On the issue of GST bill, the Finance Minister said J&K has sought protection for the State’s special taxation powers and also keeping the State out of the purview of the GST council given that the state legislature has residuary powers.

“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. J&K is the only state in the country with the powers to tax services,” Dr Drabu said.

The Finance Minister 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. “However, 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 have been suggested. 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,” he said.

Dr Drabu said the draft GST law 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 that it will be done," he said.

Further he said that before extending it to Jammu and Kashmir, the GST Bill will be put to the State Legislature for ratification and modification if required.

As regards GST as a tax regime, Dr Drabu, however, made it clear that J&K, being an importing state would be a beneficiary  of the GST regime unlike Tamil Nadu which is a manufacturing state and a loser in the new tax regime.



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