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No indication of earlier implementation

Young Bites. Dated: 6/24/2017 11:40:35 AM

Though the recently passed Goods and Services Tax Act excludes the state of Jammu & Kashmir from its applicability, this is not to be interpreted to mean that GST will not be implemented in the state. Nevertheless, the state government of J&K can still integrate its revenue with Goods and Services Tax, provided they pass two separate bills in their state assembly. The J&K Assembly will have to pass a legislation stating that the two laws viz. Central Goods and Services Tax (CGST) and Integrated Goods and Services Tax (IGST) are applicable to them. This approval by the state assembly will be in addition to the requirement of all states to approve the State GST law.Once this is done, the Central government will again be required to amend the CGST and IGST law and extend the applicability to the state of Jammu and Kashmir; which is currently not the case. If you are a business registered under existing tax laws and operating in the state of Jammu & Kashmir, or if you intend to start a new business there, be assured that you will need to obtain registration under the new Goods and Services Tax law. However, you may enjoy the benefit of minimum threshold limit of Rs. 20 lakh. After the state government failed to evolve a consensus over its implementation in the state, the special Assembly session did nothing to change the state of affairs. Both the opposition and the business community have objected to GST’s extension to the state in its current form and the modifications being dangled by the PDP-BJP coalition haven’t been enough to allay the fears. J&K is the only state in India which can tax services. Elsewhere, taxes on manufacture of goods or provision of services are the exclusive domain of the central government. Only consumption tax is levied by the states. Even as the Central government will herald the beginning of GST tax regime during a late night function at Central hall of parliament on 30 June, Jammu and Kashmir State will skip the deadline to roll out the indirect tax regime. In the wake of differences between PDP and BJP over its implementation and opposition by political parties including the Hurriyat Conference to the new tax law, there seems to be no indication of earlier implementation of GST in the state. The BJP has been pressing on its coalition partner that the GST regime should be implemented at the earliest, but since the PDP is expecting that the new tax law will trigger an agitation its implementation has been deferred. Although government earlier said that a committee headed of different political parties will look into the extension of GST into the state, no orders have been issued to constitute it. The Hurriyat Conference has voiced its opposition to the GST law and has termed it as “ tantamount’’ to the weakening of state’s economy, while the different industry bodies have opposed it stating that this would erode the special status of the state. Both the National Conference and Congress have voiced their opposition to the GST law. NC has even charged the government of eroding the special status of the state and lack of any roadmap. However, even as the state government has reiterated that it was for the first time that any constitutional amendment of Indian constitution was slated for debate in the legislative assembly, it fears that the pressing with the GST will trigger an agitation in Kashmir. The opposition to GST has come few days before the annual Amarnath pilgrimage is to begin from 29 June. The businessmen and traders will face a difficult time and delay in implementation of GST will only harm the economy.