Finance Minister Abdul Rahim Rather has asked Empowered Committee of state finance ministers on proposed ‘goods and services tax’ (GST) to provide adequate safeguard to constitutionally guaranteed special status of Jammu and Kashmir before framing its recommendations for Constitutional (115th amendment) Bill 2011, a state government release Tuesday said.
Rather was speaking at a meeting of empowered committee (EC) in Bhubaneswar, Odhisa.  Rather conveyed state’s main concern on the proposed amendment Bill, which needs to be addressed adequately, before implementation of the GST in Jammu and Kashmir, it said.
“… with the implementation of the Goods and Services Tax regime, the position of Jammu and Kashmir state would be entirely different as compared to the other states of the Union. All other states would be surrendering the exclusive authority to tax goods and, in turn, get the additional authority to tax the hither to out of bound service sector. On the contrary, the state of Jammu and Kashmir being already competent to tax goods as well as services, unlike other states, would not get any additional authority except a share from the central divisible pool,” Rather told the EC.
Rather said as a matter of fact the division of powers between the Union of India and the state of Jammu and Kashmir is not at the same footing as it is in respect of other states of the Union.
Rather said, it is therefore, necessary that before the finalization of its recommendations on the Constitutional (One Hundred and Fifteenth Amendment) Bill 2011, the constitutionally guaranteed special status of the Jammu & Kashmir is not ignored by the Empowered Committee of State Finance Ministers.
Rather also expressed his concern regarding the proposed dual integrated model of GST. ‘Dual Control’ both by states and center is perceived as an impediment in the implementation of GST and it is felt this is not a dealer friendly and may not be administratively an efficient tool of recovering the taxes, he said.
Rather also said, the proposed GST has been considered by the state cabinet and it has been decided, vide Cabinet Decision No 137/21/2012, dated 01.08.2012, that after the coming into force of the Goods and Services Tax regime in the country, the State Legislature will consider the enactment of a legislation on the subject in which the State would make provisions in tune with the GST regime, applicable to all the other States.
The components of GST would be levied by the State itself under the proposed legislation, which would be analogous to the statutory framework, proposed by the Union of India for all other states. The State would lay down a mechanism for quantifying the component of CGST and IGST, which the state shall collect for and on behalf of the Union of India and pass on such component to the Union of India, of course, after the deduction of collection charges and subject to the mechanism as may been envisaged under the state legislation. Such a mechanism will be in conformity with the special constitutional position enjoyed by this State under the Constitution of India as also ensure participation of the State in the proposed GST regime.