A week after the Goods and Services Tax (GST) was rolled out across India except Jammu & Kashmir, the tax regime acquired the ‘national tag’ as the J&K legislature passed a Bill to pave way for the rollout of the GST in Jammu & Kashmir from Friday midnight.
The Bill was passed after President Pranab Mukerjee issued Ordinance to bring J&K under the purview of 101st amendment in the Indian constitution. The Ordinance was issued following an elaborate legal process during a special session of the J&K legislature that saw Opposition and ruling coalition members at loggerheads over the issue. The debate on GST revolved around the special status of Jammu & Kashmir in the Indian constitution.
On Friday, the two Houses of legislature passed Jammu & Kashmir Goods and Services Tax (JKGST) Bill 2017 with a voice vote. The Bill was moved by the Finance Minister Dr Haseeb Drabu in both the houses during separate Sessions.
The Bill makes the provision for levy and collection of tax on intra-State supply of goods or services or both by the State of Jammu & Kashmir and the matters connected therewith or incidental thereto.
While moving the Bill in the Houses, the Finance Minister gave detailed account of the legislation and informed that the Bill has received the assent of the President of India. He informed that all necessary safeguards to Section-5 of the J&K State Constitution and those enshrined in Article-370 of the Indian Constitution have been incorporated in the Presidential order regarding which apprehensions were expressed by some Members in the legislature during the discussion on this important legislation.
Before moving the Bill for consideration and passing by the State legislature, Drabu read out the contents of the Presidential Order pertaining to the special status of the state and its exclusive taxation powers.
“Although there is no tradition of tabling a Presidential Order in the House, we are starting a new tradition in the democracy of the State by tabling this Presidential Order in the House,” he said and added that the Proviso-3 of the Presidential Order clearly states that; “Notwithstanding anything contained in this order, the powers of the State of Jammu & Kashmir as per Section-5 of the Constitution of Jammu & Kashmir, shall remain intact.”
“The legislature of the State of Jammu & Kashmir shall have the powers to make laws with respect to Goods and Services Tax levied by the State,” Dr Drabu said while reading from the excerpts of the Presidential order pertaining to the special status and exclusive taxation powers of the State.
The legislature of the State of Jammu & Kashmir shall have exclusive powers to make laws in respect of imposition of any taxes enabled by Section 5 of the Constitution of Jammu & Kashmir, he added.
Notwithstanding anything contained in clause 4 to clause 11 for the purpose of any decision impinging on constitutional provisions relating to the state of Jammu & Kashmir, the concurrence of the representative of the State of Jammu & Kashmir in the Goods and Services Tax (GST) council shall be mandatory and the procedure provided under Article 370 shall be followed, the Presidential Order reads.
It adds that nothing in this article shall affect in any manner whatsoever the legislative competence of the State of Jammu & Kashmir as guaranteed by virtue of Section-5 of the Constitution of Jammu & Kashmir.
The Order reads that the amount apportioned to the State shall not form part of the Consolidated Fund of India. “Where an amount collected as tax levied under clause (I) has been used for the payment of the tax levied by a State under article 246 A, such amount shall not form part of the consolidated fund of India,” it says.
“The incorporation of constitutional safeguards into the Presidential Order upholds this Govt’s our resolve to protect the special status of Jammu and Kashmir,” Drabu said.
“The Opposition had made a huge issue out of a non-issue by claiming that the fiscal autonomy of J&K will be compromised and the special status of the state under Indian Constitution will be eroded. The Presidential Order has respected the sanctity of the J&K legislature by safeguarding our Constitutional, Economic and Administrative powers,” he said.
Chief Minister Mehbooba Mufti welcomed the presidential ordinance terming it as the victory of the democracy of the country and a tribute to the powers of the State legislature.
Mehbooba described the order as an important milestone in the constitutional relations between the State and the Centre. She said it is equally satisfying that for the first time in the State’s history that the sensitivities and concerns flagged by the government and legislature of the State were duly incorporated by the Centre while issuing the Presidential Order. “Otherwise during the last 70 years, unfortunately, central laws were extended to the State in a manner which raised doubts in the minds of many people here”, she said in her intervention adding that with such a transparent conduct of discussions on the present subject, the doors for any manipulations in constitutional relations of the State with the Centre stand closed for ever.
The opposition National Conference said the Presidential order was full of deceit.