GST: J&K is looking at a tourist refund policy, says state FM Haseeb Drabu

Jammu & Kashmir will be ready for a July 1 GST rollout and awareness will be spread among traders

Jammu and Kashmir will be ready for a July 1 rollout of the goods and services tax (GST) and awareness will be spread amongst traders, Haseeb Drabu, the state’s finance minister, tells Dilasha Seth, at the GST Council meeting in Srinagar. Edited excerpts:

What exemptions has J&K asked for under GST, besides handicrafts and handlooms?

We are looking at a tourist refund policy. We need to get that system in place — all countries that have a GST provide refunds to tourists. But, our more important concern is handicrafts, the backbone of our economy. Hopefully, we will build a consensus on that.  We also raised issues regarding walnuts and almonds — from the exempt category, it has gone to 12 per cent. Let us see how that gets addressed. 

With the rates almost finalised, how prepared is J&K for a July 1 rollout?

On the legal, regulatory and rule fronts, there is no issue. The information technology platform is also on course. While the officers are trained, traders are not; that is a cause of concern. But, as we go forward and create awareness, their resistance will be put off. We should be able to meet the July 1 deadline.

Services were not taken up for discussion on Thursday. But, what rate slabs are you looking at?

We’ll discuss services tomorrow. I reckon we’d settle somewhere around the current rates. The contentious issue was the role of Centre and states, which has been sorted. 

Will too many tax slabs not complicate the GST regime, considering it was proposed as a single rate structure?

The bulk of items are under the two standard rates of 12 and 18 per cent. So, the stage is set for eventual movement to a single rate. The 28 per cent rate band has shrunk, the five per cent rate and the exempted category are converging. If you look at the macro picture, the real story is that two standard rates account for 60-70 per cent of all items.

Is J&K planning to include real estate?

We have done a number of things that other states followed, such as moving the Budget to January. We were the first state to do the plan, non-plan replacement. We are the first state looking at a universal basic income scheme. In the course of negotiating with 30 states, we might not have been able to arrive at an ideal GST but this is work in progress. The position that J&K is in is due to its constitutional status. Let’s see if we can do a slightly better GST by including what has not been till now. 

But, we don’t want too many imponderables just now. We are moving to a different tax regime, a self-assessment model. One of the major challenges I will raise tomorrow is how the tax administrative structure changes.