GST - J&K Finance Minister 'Abdul Rahim Rather' is Chairman of Empowered Committee
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Rather is a lawyer and the senior-most MLA in J&K, having entered the Assembly for the first time in 1977. He had become the Finance Minister of the State in 1983. He is perhaps the only legislator to win from the same constituency six times in a row.
But it is ironic that the Finance Minister of J&K is the chief of the GST Committee, for the Indian Service Tax is not applicable to J&K.
Addressing the last meeting of the Empowered Committee in Bhubaneswar recently, Abdul Rahim Rather made some interesting comments:
1. The proposed dual integrated model of GST ‘Dual Control' both by States and Centre is perceived as an impediment in the implementation of GST and it is felt this is not dealer friendly and may not be administratively an efficient tool of recovering the taxes.
2. 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 hitherto 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.
3. 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. The State of Jammu and Kashmir enjoys a special status under the Constitution of India and its Constitutional relationship with the Union of India is governed by Article 370 of the Constitution of India as amended vide Constitution (Application to Jammu and Kashmir) Orders, promulgated from to time by the President of India.
4. The matter has been considered by the State Cabinet and it has been decided, vide Cabinet Decision 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.
5. 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.
Let us hope Mr Abdul Rahim will be able to bring in the elusive GST.