Srinagar: Jammu and Kashmir state will lose share from the central tax regime – Goods and Services Tax (GST) – as it has not cleared the GST laws yet, said Finance Minister of India, Arun Jaitely.
India is shifting its taxation system to GST from July Ist.
Along with J&K, Kerala also has not yet cleared the central GST law.
President, vice-president, Prime Minister and two former prime ministers will share dais to launch GST in India. It will be a mid-night launch during the intervening night of June 30 and July Ist.
“J&K and Kerala will lose out on the compensation package of the Central government if they do not accept the unified indirect tax regime,” said Jaitely on Tuesday in New Delhi.
“All GST Council decisions have been taken through consensus. SGST has been approved by all states barring J&K and Kerala. Kerala will consider it this week. Jammu and Kashmir is going through the process. It will have to do it separately as the State has different status,” FinMin Jaitley said.
He added that consumers and traders both would suffer if states kept out of the GST.
“They will not get input tax credit and consumers will get more expensive products than the rest of the country. There will be another impact on the compensation to states. Those who don’t join don’t get that benefit of revenue loss compensation for 5 years,” Jaitley said.
The PDP-BJP government in J&K is facing stiff resistance against extension of central GST law to state in its current form.
The opposition parties cite fiscal autonomy of J&K state. Till now, J&K state is able to decide and levy taxes on its own. However, same powers shall be surrendered to GST council after the extension of the central GST law, they said.
Citing GST as a historic reform, he said, “I think that GST is a reform step for the better. All reforms in their initial phase have an impact and are seen as disruptive and in the long run are seen as result-yielding reforms. When you go for reforms, you should never blink. Because when you blink, you get derailed.”
