* Centre, State incentives will continue: FM
Excelsior Correspondent
JAMMU/SRINAGAR, June 28: Even as the Government today said that it was making fresh attempt tomorrow to evolve consensus on implementation of Goods and Services Tax (GST) regime in Jammu and Kashmir at a crucial meeting of All Party Consultative Group, called in Srinagar, before taking a final call on new tax regime, the main Opposition, National Conference has called a meeting of its Core Group, the highest decision making body in Srinagar, at 11 am tomorrow, to take decision on GST including party’s participation in the meeting.
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Finance Minister Dr Haseeb Drabu told reporters that Jammu and Kashmir being a consumer State will get huge benefits by implementing GST and its non-implementation will lead to huge losses for the State.
Drabu said: “We will take a final call on GST implementation tomorrow once we get the full sense of all-party meeting. I do not want to preempt anybody. Let us understand what their views are. Maybe there is something I have not seen, maybe they come up with a wonderful solution which meets all requirements and makes all of us happy.”
The all-party Consultative Group, headed by former Deputy Chief Minister and MP Muzaffar Hussain Beg, was constituted by the Government after an all-party meet failed to evolve a consensus over the issue.
The Finance Minister said the State Government has reached out to the opposition parties of the State and sent them all the relevant documents. “The Government is trying to build a consensus. This is a very fragile society. We are going through difficult times. We have reached a position where you are know questioning yourself in a society the way things are happening around us, the way things have been dehumanized. Anything can spark off”, he said.
Drabu said that they are trying to build both political and legislative consensus on GST because GST is a regime that would last for the next 30-40 years. “You do not want to create social chaos. So, it is in the interest of the society, not just the economy, to build a certain political as well as legislative consensus,” he said.
“It has implications on consumers, traders, businesses, government, civil servants and banks… Many amendments were implemented here but nobody knew anything. We decided that we will go to the people, we will discuss it inside the Assembly, outside it. It is not for the lack of trying. The last meeting (of Consultative Group) was boycotted (by National Conference and Congress), but we still tried. The Chief Minister told me to make another attempt and keep trying,” the FM said.
Meanwhile, the National Conference Core Group, headed by former Chief Minister Omar Abdullah, would meet at Nawa-i-Subh in Srinagar at 11 am tomorrow to discuss Government’s decision on implementation of the GST.
“We will take a call on the GST as well as our party representative, Abdul Rahim Rather, former Finance Minister’s, participation in the meeting,” NC sources said.
The Core Group meeting will be attended by Rather, Ali Mohammad Sagar, Mohammad Shaffi Uri, Choudhary Mohammad Ramzan, Mian Altaf, Akbar Lone, Surjit Singh Slathia, Ajay Sadhotra, Devender Singh Rana and Nasir Aslam Wani.
The National Conference and Congress had abstained from the Consultative Group meeting on June 24.
Congress representative in Consultative Group, Aijaz Ahmed Khan, former Minister, said he was studying documents furnished by the Finance Minister on GST along with the invite, and would decide tomorrow morning on participation in the meeting. NPP leader and former Minister Harshdev Singh said he would abstain from the meeting as he has already made it clear that the GST should be implemented from July 1 after reducing the taxes.
Rest of the Opposition leaders including MY Tarigami (CPM), Hakim Mohammad Yasin (PDF), Engineer Rashid, Pawan Gupta and GH Mir would attend the meeting, which will be chaired by former Finance Minister and PDP veteran Muzaffar Hussain Baig. Sunil Sethi will represent BJP while Finance Minister Dr Haseeb Drabu, Parliamentary Affairs Minister, Abdul Rehman Veeri and Law Minister Abdul Haq Khan would represent the Government. Nizam-ud-Din Bhat will represent PDP.
The BJP would reiterate its stand for implementation of the GST by July 1.
Drabu said GST is the superior version of VAT and is beneficial for the consumers. “The biggest beneficiary of the system of GST is the consumer. The first most important thing is that it is a very transparent system. Second benefit is to the manufacturer as he pays only for the value-added amount. The rates will become cheaper. I am not saying that the rates will become cheaper from July 2, it will take up to eight months.
The FM said that the Jammu and Kashmir which is a consumer State will get benefits by GST. “In the GST council, we have decreased rates of about 11,000 commodities out of about 12,000. The rates will become cheaper as the states will face the revenue loss of about one lakh forty thousand crores by implementation of GST. Consumer states like J-K, north-east and Himachal Pradesh will benefit, while as the producer states like Gujarat, Maharashtra, Tamil Nadu and Karnataka will face losses,” he said.
He said GST would also lead to decrease in corruption at the hands of tax officials. “It will have a direct impact on corruption because cash transactions will decrease. Then, the tax harassment, through tax officials, will stop as it is a system based on self-assessment,” he said.
The finance minister said while there would be chaos for some time after the implementation of the GST, the new tax regime would give impetus to the businesses to grow. “There will be confusion for first three to five months, there will be chaos like the way it happened at the time of demonetization. I call this a disruptive policy change in which there will be some disruptions, but the gains are much higher,” he said.
“For J-K, those with a turnout lower than Rs 20 lakh will not have to file returns. Those with lower turnover than Rs 75 lakh, they will have to fill in one single form. The intent is that the businesses must grow,” he added.
Drabu said a perception has been created that GST would impact the special status and the fiscal autonomy of the state, but there is no compromise on Article 370. “There is no violation of special position. There are enough safeguards to not only protect our special status, but also our constitution,” he said.
The finance minister said the state would face huge losses if the GST is not implemented in the state. “If GST is not implemented, then you cannot trade. No trader can bring goods here when there is no GST number. Can we live as an isolated economy? We will not be able to have basic items here. There will be huge shortages. Then, we cannot export items like apples, walnut and cherry. “The worst sufferers of the non-implementation of GST will not be the government, but the consumers, traders and the business. There will be smuggling of goods,” he said.
He said in absence of an alternative trading links, J&K is literally integrated with mainland Indian market. Entire requirements are imported from various parts of the country and everything produced or manufactured in J&K is exported to the same market.
“Twin taxation systems dissociated from each other will entail huge costs to business and to public finance system,” he said and added that trading processes will be subjected to twin taxation systems making everything costly in J&K, a cost that ultimately the consumer shall have to bear. He said traders will have to pay more for managing twin systems and it could create a situation that J&K may not get buyers or sellers. The Input Tax Credit (ITC) that shall otherwise become available to the end consumer will get blocked at Madhopur, the first town outside J&K.
Allaying the fears of traders, the Finance Minister said the incentives offered by the State and Central Government on various industries in Jammu and Kashmir will continue. “The State as well as the Central Government will continue to provide exemptions, factoring in all the incentives,” he added.
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