Kashmir's GST Journey Runs Into Autonomy Hurdle

Jammu and Kashmir is the only state in the country where the new tax regime hasn't been launched yet because the state assembly is yet to give it a go-ahead.

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Kashmir's GST Journey Runs Into Autonomy Hurdle

Traders and business community have warned government against implementing GST. (PTI)

Srinagar:  Shops and business establishments were shut in Kashmir valley on Saturday against the Goods and Services Tax even before it is rolled out in the state.

Jammu and Kashmir is the only state in the country where the new tax regime hasn't been launched yet because the state assembly is yet to give it a go-ahead.

But the protest against GST is not over the economics of the single tax regime, but the politics.

After political groups, traders and business community have warned government against implementing new tax regime without constitutional safeguards for Jammu and Kashmir so that its autonomy isn't eroded.

"We are not against GST but we want a mechanism that will not undermine special status of J&K," said Mohammad Yasin Khan of Kashmir Economic Alliance, one of the groups opposed to extending GST to the state on the same terms as other states.

Jammu and Kashmir is the only state where central GST law is not applicable because of its separate constitution. If not implemented,  people and business community will suffer double taxation and could lose business opportunities to the tune of thousands of crores.

Officials say GST Act has to be extended to state of Jammu and Kashmir through a Presidential order only after state government gives its concurrence. So far, state has absolute powers in taxation but once GST is implemented, the opposition says it will undermine the special status of Jammu and Kashmir.

Finance Minister Haseeb Drabu said the assembly was likely to pass the GST bill on Tuesday when the assembly meets at a special session.

Union Finance Minister Arun Jaitley has made it clear that the people of the state would be the losers if the state doesn't integrate its taxation with the rest of the country.

Mr Jaitley said he had spoken to the National Conference's Omar Abdullah to help build consensus in the state. He said he hoped the state would come into the GST fold in few days else goods sold in the state would be more expensive than the rest of India.

But if the opposition doesn't cooperate, the Mehbooba Mufti government might find it difficult to navigate the bill through the assembly and expose the PDP-BJP alliance to attacks from the opposition.

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