*All exemptions, subsidies will remain intact
Fayaz Bukhari
Srinagar, July 5: Legislative Assembly today adopted a resolution for implementing Goods and Services Tax (GST) regime in Jammu and Kashmir through a Presidential order calling on the Centre to safeguard the special status and exclusive taxation powers of the State.
The resolution moved by Finance Minister Haseeb Drabu, after two days of discussions, was adopted by a voice vote even as National Conference, Congress, CPI(M) and an Independent MLA protested against implementing the GST regime in the State in its present form.
Replying to the debate before the adoption of the resolution, Drabu said the resolution calls upon Centre to implement GST in the State while incorporating safeguards for protecting the special status of the State and its exclusive taxation powers. “We will appeal, argue, debate and discuss with the Government of India, as a matter of principle, Section 5 of the J&K Constitution, which gives us exclusive powers of taxation, shall be protected,” the Finance Minister read from the draft of the resolution.
Drabu said the Article 370 is not compromised in any way through this Presidential order. “GSTN council will not be a way to subvert the process and enough safeguards will be built as regards the State of Jammu and Kashmir empowering the representatives of Jammu and Kashmir and bringing in under the ambit of Article 370,” he said.
Finance Minister said the exclusive powers of taxation under Section 5 of the Constitution of the State will not be impaired. “And the consolidated fund of J&K or any such thing will not be impaired. There is no question about any amendment being made to the Constitution”, he said.
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“All exemptions, remissions and subsidies across sectors will remain intact. J&K will retain unbridled powers to tax. Member of J&K in GSTN will enjoy overriding powers on issues pertaining to J&K,” Dr Drabu tweeted tonight.
Drabu said the business activity in the State had dropped to almost 50 per cent due to non-implementation of the GST in the State after the new regime came into force in rest of the country on July 1, causing losses to the State exchequer.
The Finance Minister said that the business and trade in Jammu and Kashmir cannot function without GST. Giving comparative data, he said while 2000 truck load of goods were imported on 4 July last year, only 1000 truck loads were imported on the day this year. “The exports of goods from the State had also dropped from 300 this day last year to 150 this year, marking a 50 per cent decline in the trade”, he added. He said that the revenue earned by the State had dropped from Rs 82 crores on July 4 last year to Rs 40 crores yesterday.
Responding to the opposition charges, the Finance Minister said there was no compulsion on the Government to bring a resolution in the Assembly on GST but it was done as part of “restoration of a process”. “I was seeking the basic sense of the House. Except Tarigami, no one has problem with GST. The differences are only on the implementation and modalities,” he said.
“If GST over writes article 370 (of Indian constitution) or section 5 (of JK constitution) I will not come back to this House,” he said. He said that the GSTN council is the first federal institution of India and balance of power in fiscal federalism has for the first time shifted towards the States.
“The Centre has pooled its sovereignty (in GSTN council). When Union Finance Minister Arun Jaitley presents his next budget in January, it will be a just statement of expenditure, of course a transparent one. This is the biggest democratization of public expenditure,” he said. Soon after Drabu’s speech, the House passed the Resolution by voice vote.
Earlier, several legislators took part in the discussion on GST Resolution. Javid Hassan Baig while initiating the debate said that they we were encouraged by their party seniors to study and understand the concept and its implications for all stakeholders. He said “that after exploring the new tax regime, I can confidently stand in favor of GST in the state”.
Baig said that GST is not just Kashmir centric, it’s for the whole nation and over 15 long years and 10000 hours of discussion have taken for making this new tax regime. Giving religious or regional overturns to this to create divide is unfortunate, he added.
He said that adoption of GST in the State will not compromise its special status and its financial autonomy in any way. He said Government will put in all necessary safeguards to protect the special rights and ensure adoption of GST will not erode Article 370 in any manner.
He also mentioned that former Chief Minister Omar Abdullah has once said that whatever “we will get, it will come from the Government of India, Indian Parliament and the Cabinet”.
The CPMI leader M Y Tarigami said that there is no clarity on the GST Resolution moved by the Finance Minister and he should clear to the House that on what lines government is going to adopt GST in the state. He said the state has been given right to discuss any law passed by Parliament to further discuss whether to adopt it or not.
Tarigami said that present GST in totality is a blow to federal polity of India and the state government should come up with its own tax law. “The Government should work within the limitations of J&K State Constitution and should look for some way out”, he said. He added that GST will affect the local fruit industry like apricots, handicrafts, horticulture sector and makes no headway to curb unemployment in the state.
NC senior leader Ali Mohammad Sagar while raising the question to all the Members said that as public representatives “we should deliver on the mandate of raising public voice in right perspective. People are pivot to democracy. Are we ensuring that their sentiments are represented and placates”. He added that if GST was as good as promoted, why are traders on strike. He requested Finance Minister Dr Drabu and the Government to understand people’s view point towards this tax regime.
Sagar said that this resolution will erode the autonomy of the state and the erosion is dangerous as it takes the financial independence out of the purview of the state. He said that GST is a financial burden that will hurt the middle and lower class, both businesses and consumers with its elaborate and high tax slabs and therefore it needs conscious discussion and deliberation before enforcing it on public.
Congress leader Usman Majid said GST is a move to reduce State’s special provisions under Article 370. He said GST is not in the interest of general public. He further said that there is no consensus among people in the state and traders are protesting all across against this new tax regime. “The present circumstances in the state do not allow for such a thing to be implemented”, he added.
Independent MLA Pawan Gupta while taking part in the discussion said that GST is a good concept and welcomed the step of unifying taxes under common thread. He said that GST will curb the interstate tax war and bring all states on a common level playing field, adding that this will lead to curbing the evasion of direct and indirect taxes, thereby leading to steady growth in the GDP.
Listing his reservations regarding implementation of GST on the ground, Gupta said that this is a revenue neutral model and therefore the benefits will go to government rather than consumers, Industry and Commerce and that the unregistered small traders will be hurt by GST. He further said that GST is a work in progress that will need to take shape overtime, according to the requirements of the state.
“If J&K does not adopt GST, the state will be at a considerable disadvantage with consumers, industries bearing brunt of it, lead to tax evasions, considerably reduces investments besides losing export edge of the state”, he said.
Gupta added that ‘we are not losing our sovereignty, we are just sharing our economic sovereignty to accrue mutual benefits. No state can survive in seclusion, we should bring GST in the state as soon as possible.’
The MLA and president of the State unit of the BJP, Sat Pal Sharma while supporting the Resolution said that GST is a historical tax regime aimed at to boost the economy of country and benefiting people from all sections of the society. He strongly advocated for its implementation in Jammu and Kashmir immediately to avoid unnecessary harassment to the common man and trading community.
Expressing his concern over the propaganda unleashed by some sections of the society and political parties on the ill effects of GST that it will infringe the State’s economy and its special position, Sat Sharma said that the new tax regime will bring uniformity in the entire country by amalgamating various taxes under one umbrella and compensate the States appropriately. He said the Jammu and Kashmir is a consumer State and will benefit hugely with the implementation of this important law. He said about 85 essential commodities have been put under 0 to 18 per cent category, which will benefit the common man.. The system will also help in curbing theft in tax.
While making some useful suggestions to the Finance Minister, Sat Sharma called for abolition of entry tax at Lakhanpur, Lower Munda, and religious pilgrimage in the State.
PDP MLA Yawar Dillawar Mir said that GST is the most beneficial regime for all and will boost the State’s economy. He said that National Conference has equally contributed in the institution of this important tax law in several meetings of GST Council of which the former Finance Minister, Abdul Rahim Rather was Chairman.
He said that when the new tax regime has been launched in the entire country, the Jammu and Kashmir cannot remain isolated and has to implement this to avoid any kind of financial and constitutional crisis. He said that the State Government will take care of various safeguards to the special status of Jammu and Kashmir.
Bashir Ahmed Dar while appreciating the State Government for calling the special session of legislature for debating the important GST regime said that the previous regimes implemented various Central legislations through backdoor system. He clarified that Government’s intention is very clear on the subject as the implementation of GST is need of the hour. The Government has brought the Resolution after taking into consideration all its pros and cons, without compromising the special status of the State and interests of all stakeholders. He said that Jammu and Kashmir being consumer State and will benefit hugely as the Centre will compensate it fully.
Engineer Abdul Rashid Sheikh questioned urgency for implementing the GST and expressed apprehensions that the State will suffer and erode the special status. He said that instead of Resolution, the Government should have brought the direct legislation for discussion. He also said that the trading industry and common man will suffer with the implementation of new tax regime.
In the Legislative Council, opposition members staged a walkout twice as they accused Chairman of the Upper House of sidelining them and left the House in protest against remarks of a ruling party legislator.
As soon as the discussion on GST resolution was initiated this morning in Upper House, the Opposition Congress legislator, Ghulam Nabi Monga regretted the unruly behavior of legislators during yesterday’s proceedings and urged upholding the dignity and sanctity of the House. “Whatever happened yesterday should not have happened. However, the atmosphere (in the House) was surcharged but we condemn it,” he said.
Without naming anyone, he said that those members who hurled abuses yesterday should apologize on the floor of the House and added: “If they won’t apologize, then we should be given a chance to respond.” The chairman of the Legislative Council, Haji Anayat Ali later directed expunging of derogatory remarks and asked both Treasury and Opposition benches to keep the sanctity of the House in mind and respect each other’s views.
Although the proceedings of the House began smoothly but Opposition created uproar soon after the Chairman asked ruling Bhartiya Janata Party (BJP) legislator Ramesh Arora to take part in the GST discussion. The Opposition members stood up from their benches and accused chairman of sideling them. The Congress MLC Ghulam Nabi Monga said they were not asked to submit their names to take part in the discussion and only ruling coalition members had been asked to do so.
“This is disappointing. The opposition members have been sidelined and only members from ruling coalition were asked to submit the names to take part in discussion. They (PDP-BJP) legislators have come prepared,” Monga said, as other opposition members created uproar and left the House despite repeated appeals by Chairman to not leave. The House later initiated the debate on GST without opposition presence.
MLC Ashok Khajuria, in absence of Arora, while initiating the debate termed the proposed imposition of GST in the state as a landmark event in the history of Jammu and Kashmir. He said if the GST is not imposed in the State, it will have to bear huge losses and cannot do business with the rest of the states. He castigated Pandit Jawaharlal Nehru and Sheikh Muhammad Abdullah and blamed them for “destruction” in Jammu and Kashmir.
The BJP MLC said the business of the state will come to a sudden halt if GST is not implemented and inflation will rise by 30 to 40 percent in the state and that state cannot bear such huge losses. Highlighting the benefits of GST, PDP MLC Saif-ud-din Bhat congratulated the Government for initiating the debate for the adoption of GST Regime in the legislature. He while lashing out at NC and PDP said a probe should be conducted into passing of 46 amendments from time to time since 1947.
The MLC Vikram Randhawa while taking part the debate, supported the resolution saying that GST is a gift for the people of the State. MLC Khursheed Alam while participating in the debate supported the resolution saying that the imposition of GST will be beneficial for the common masses as well as the businessmen and that it will end the supremacy of few businessmen and will benefit the consumers.
He said Jammu and Kashmir is a consumer state and it is not possible for the State to import goods from other states in the absence of GST. He said J&K can’t afford to bring its business to standstill by not imposing GST. He said the State’s produce like apple can’t be exported to international and national market in absence of GST. He said there is commitment in resolution itself that it will safeguard JK’s special status.
MLC Pradeep Sharma while speaking in favour of the resolution said J&K being a consumer state produces less and consumes more. He said consumer states will be benefitted more in GST regime and will help in increasing the GDP of the state.
Surinder Mohan Ambardar while supporting the resolution said the imposition of GST is the second major landmark decision in the history of India after the midnight session on 15th August 1947 when the then Prime Minister announced Freedom of India. He said that single window system is being created under new taxation rule will benefit the common masses especially to the people of JK as State is consumer State. He said it is historical step of the present Government that brought the GST resolution in Legislature for debate instead of going for an ordinance and added that “economic as well as financial autonomy will be strengthened by the adoption of GST regime”.
MLC Charanjeet Singh while speaking in support of the resolution said the GST regime will benefit the state as a whole and common man will be befitted while growth rate will be increased besides tax evasion can be reduced.
After persuasion by Chairman during brief adjournment at around 12:15 pm, the Opposition members came back to the House at 12:55 pm. But shortly, the Congress legislator Ghulam Nabi Monga stood up from his bench and raked the issue of “life threat” remarks, allegedly by PDP MLC Yasir Reshi yesterday to NC’s Sajad Kitchloo. He, while addressing the chair, said they – without naming Yasir – should apologize.
Soon after Monga’s demand, Yasir Reshi stood up from his bench and had verbal altercation with Sajjad Kitchloo. The PDP MLC said he respects legislators but went on to say that “if anyone hits me, I will hit him back”. The remarks angered the opposition members who stood up from their benches and had verbal with Yasir Reshi.
Sensing trouble, the chairman Anayat Ali as well as Leader of the House, Naeem Akhtar tried to pacify opposition but they continued their protest and accused the ruling legislator of “threatening to kill”. Both chairman and Akhtar lashed out at Yasir Reshi for his “bad language”. The chairman again urged the Yasir Reshi to not indulge in “unruly behavior”.
However the opposition members did not relent and they staged the second walkout. The Upper House legislators of NC and Congress later held protest sit-in against the Government outside Legislature complex for nearly an hour. They shouted slogans against the PDP-BJP Government and accused it of silencing opposition voice.
The House proceedings, after being adjourned at 1:10 pm, began after two hours and the discussion on GST was resumed. The MLC Yasir Reshi while supporting the resolution congratulated the government for turning to legislature before adopting GST regime in the state. He said it has sent a positive message and reiterated the special status of the state.
Vibodh Gupta also took part in debate and discussion on the resolution for adoption of GST in the State and supported the resolution saying that its adoption will benefit the common masses. MLC Surinder Choudhary while speaking over the resolution highlighted the importance of GST for the economic and financial development of the State. MLC Ramesh Arora while taking part in debate on the resolution supported the resolution and discussed various benefits of GST.
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