J&K assembly passes GST bill, safeguards state’s taxation rights

The Jammu and Kashmir (J&K) legislative assembly on Friday passed the state goods and services tax (GST) bill 2017, and the rollout for the indirect tax reform was set for midnight later in the day.

Moving the bill, finance minister Haseeb Drabu gave a detailed account of the legislation and informed the House that President Pranab Mukherjee had given his assent to a resolution passed in the state assembly on Wednesday.

The resolution proposed adopting GST while preserving the state’s taxation powers, enshrined in the J&K Constitution. Drabu informed the House that all necessary safeguards to section 5 of the J&K State Constitution have been ensured, an official from the J&K government said on condition of anonymity.

A member of the GST Council, who also spoke on condition of anonymity, explained that unlike in the case of the rest of India, the power to levy state taxes in J&K is not part of the Constitution of India’s Seventh Schedule.

Instead, it is part of the J&K Constitution. Hence, the 101st Constitution amendment, laying the GST framework, is not applicable to the Himalayan state. The resolution passed by the state assembly on Wednesday adopting GST was to address this issue and facilitate adoption of GST.

The second person quoted above, who has not seen the approved version of the resolution, said that although it could refer to retaining the state’s taxation powers, it is unlikely that J&K will now levy a value-added tax once GST is in place.

Drabu said that there will be no entry tax on goods in the state. However, toll payment is a state subject and the state cabinet will decide on it in due course, said the state government official quoted above.

Members of opposition parties boycotted the proceedings as the bill was passed in the assembly,

reported from Srinagar.