*New tax to be rolled out on June 30 midnight
Sanjeev Pargal
JAMMU, June 20: Finance Minister Arun Jaitley today did some plain speaking on confusion in Jammu and Kashmir over implementation of Goods and Services Tax (GST), which could lead the State to miss the nation in joining “one tax structure” that would be rolled out on the mid-night of June 30 and July 1 by top Constitutional and political authorities of India including President Pranab Mukherjee, Vice President Dr Hamid Ansari, Speaker Sumitra Mahajan and Prime Minister Narendra Modi.
Addressing a press conference in New Delhi this afternoon announcing launch of the GST countrywide on June 30-July 1 midnight, Jaitley said only two States-Jammu and Kashmir and Kerala have not given their nod to the GST so far but said Kerala was almost on board and would be switching over to the new tax regime.
Reply to a question on delay in implementation of GST in Jammu and Kashmir, Jaitley said it would not only be the State but the consumers as well as traders would also suffer, where the ‘One Nation, One Tax’ regime is not made applicable.
“Both traders and consumers will suffer loss due to delay in implementation of GST (in Jammu and Kashmir). While the consumers will get materials, which is costlier than rest of the country, the traders will have to pay the tax twice. Moreover, the traders will not get the benefit of input tax,” the Finance Minister said.
“At the same time, the State Government will not get compensation package, which included guaranteed revenue plus 14 per cent interest for five years,” Jaitley said, adding this way the State, the consumers and traders all would suffer due to delay in implementation of the GST by the State Government.
Asserting that Jammu and Kashmir has been citing ‘Special Provisions of the Constitution’ though it was not opposed to the GST regime, Jaitley said the consumers as well as traders will have to pay both Central as well as State taxes in the absent of new tax regime.
Describing GST as consumer as well as trade friendly, the Finance Minister said only Kerala and Jammu and Kashmir have so far not approved the new Act. However, he was confident that Kerala would shortly join the GST bus, which has been conveyed by the State Government.
Meanwhile, sources pointed out that consumers in Jammu and Kashmir would have to bear the brunt of PDP-BJP Government decision to delay implementation of GST in the State as they would not only have to pay additional taxes but there were also apprehensions that some items could disappear from the market for brief period.
Admitting that delay in part of the PDP-BJP Government in implementation of the GST could lead to chaos, sources said uncertainty created by the Government would cost the consumers dearly. Even a number of traders were supporting implementation of the Act as they feared that their trade with other States could come to a halt due to two different tax structures-one in Jammu and Kashmir and another in rest of the country.
The people were of the view that the State BJP leadership hasn’t been able to exert pressure on the PDP to implement the GST in time to join the country in ‘One Nation, One Tax’ regime. Instead, they said, the Government has succumbed to the pressure of opposition parties and Kashmir based traders, to delay implementation of the new tax regime, which has been adopted by 168 countries.
Sources pointed out that North-East region of the country, which has most under-developed too had apprehensions initially over implementation of the GST. However, Minister Incharge North East Dr Jitendra Singh personally visited each and every North Eastern State, met the Government and trade representatives and allayed their apprehensions. As a result, all North-Eastern States have now agreed to implement the GST.
PTI adds from New Delhi:- The Government will not blink on rolling out the GST from July 1, Finance Minister Arun Jaitley said today, emphasising that businesses cannot give any excuse for not being ready as enough time was given to them for preparation.
However, implementation of the Goods and Services Tax (GST), which will unify more than a dozen separate levies to create a single market, may result in “some disruption” and “technological glitches” initially as traders and the smallest of businesses will have to file returns online, he added.
GST, which was originally planned to be implemented from April 1 but was deferred by three months, will be launched at a grand function in the historic Central Hall of Parliament on the midnight of June 30.
The biggest tax reform since Independence, which will gradually re-shape India’s business landscape by making the world’s fastest-growing major economy an easier place to do business in, would bring down barriers between 30 States and unifying the USD 2 trillion economy and 1.3 billion people into a single market.
Jaitley said GST over the medium to long term will lead to higher revenues to Centre and States while also increasing the size of the economy and having a positive impact on the GDP.
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“We should be prepared that when the switchover will take place. In the short-term, there will be some challenges,” he said. “The reform step is for betterment. All reforms initially are seen as disruptive, and in the long run are seen as result yielding reform.”
Jaitley said the process of registration of existing central excise, service tax and state VAT payers in the new system was “going on well”.
“It is not a very complicated process,” he said adding GST will check tax evasion and in the long run lead to rise in number of the assessees.
As many as 65 lakh assesses have already registered and more are expected to sign up. “65 lakh who have registered they did not face problem, the five who have faced problems are on Twitter,” he quipped.
Ruling out deferring the rollout because of a small number of people who say businesses are not ready, he said when reforms are implemented “the first principle is you should never blink. If you blink, then you get derailed.”
“We have for the last six months saying that the date is July 1. Nobody had any business to be not ready,” he said.
Jaitley said the Government has already relaxed the dates for filing of initial returns and traders and businesses now have time till September 5, instead of previous August 10, for filing the returns and being ready.
“There is still two and a half months to be ready, but if he (business) is still not ready, I am afraid, but he doesn’t want to be ready,” he said.
Reminiscent of India’s tryst with destiny at the mid- night of August 14-15, 1947, Parliament’s historic Central Hall will host an hour-long function on the intervening night of June 30-July 1 to mark the rollout of GST
Jaitley said the GST Council has arrived at tax rates on most of the commodities on the basis on “equivalence” so that incidence of tax remains at the current level.
“The tax rates that has been fixed, that will apparently lower our tax revenues. But we are hoping that even after reducing rates the revenues won’t come down because evasion would be checked in an efficient system,” he said.
Asked about GST’s impact on inflation, he said when tax rates come down it also has an impact on inflation, but it would also depend on monsoon and oil prices.
“In some cases, because there are public interest involved, we have in fact brought down the tax rates. On first principle, Centre and States have suffered a revenue loss but we are hoping to make up for that loss because of more efficient system,” he said.
The anti-profiteering clause is transient and should act as a deterrent. “I hope we are not compelled to use it,” he said.
He said almost all States have cleared the State GST (SGST) Act, with the exception of Jammu and Kashmir and Kerala.
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