New Delhi, Apr 22: J&K Finance Minister, Dr Haseeb Drabu today called for constitution of a Sub-Group of the Empowered Committee to deliberate on the implications of Goods and Services Tax (GST) regime for Jammu and Kashmir in view of the State’s special taxation powers.
Speaking at the meeting of Empowered Committee of Finance Ministers on GST, Dr Drabu said being the special taxation area it has to be ensured that the taxation powers of J&K are not encroached upon under the new tax regime.
The meeting was chaired by Union Finance Minister, Arun Jaitley.
Drabu strongly advocated constitution of a Sub-Group of the Empowered Committee to deliberate on the implications of the new tax regime for J&K.
Drabu said if the GST is implemented in its present form in the state, J&K will lose its taxation autonomy.
He said J&K is the only state in the country that has the power to tax services. “By virtue of its Sales Tax Act, J&K has the power to tax both the goods and the services. All other states in India have the power to tax the goods only. Under GST regime, J&K will be surrendering the exclusive authority to tax goods and services,” he said.
While all other states have ratified the constitutional amendment regarding GST, the proposed Sub-Group would decide on its applicability to J&K as two earlier amendments – 46th and 88th – are also not applicable to J&K, an official statement said.
The Union Finance Minister, the statement added, while concurring with Dr Drabu’s views said that it is for the government of Jammu and Kashmir to decide the manner and the method on how the GST would be applicable to the State, while safeguarding its own taxation powers.