J&K staring at double taxation: Economist

As the July 1 rollout date for implementation of Goods and Services Tax (GST) nears, Jammu and Kashmir may have to face double taxation in view of the failure of the state to pass the legislation, experts said.
All states, except Jammu and Kashmir, have passed their State GST bill.
Jammu and Kashmir has not passed the legislation as the government faced severe opposition to the new tax regime from political parties and business community, which claimed that it compromises the financial autonomy and special status of the state guaranteed under Article 370 of the Constitution.
In the absence of implementation of the GST, experts believe, the state would face double taxation.

"In case the government fails to come up with something (Legislation) before the July 1 deadline, the state will face double taxation," noted economist Nisar Ali told PTI here.
Ali said the government, the people and the business community here cannot afford double taxation.

"They will resist it," he said.
He added that the government has to come up either with a modified version of the Act or bring its own legislation.
"They have to come up with something, either their own Act or a modified version of the national act, otherwise the people of state will have to pay double taxes," he said.

Ali said the state government has been "trapped" after there was stiff opposition from various political parties as well as the business community.
"Government is trapped now. There has been very strong reaction from various stakeholders and so it failed to pass the legislation in the special session of the assembly.
"It announced forming of an all-party panel, but so far nothing has come to the fore," he said.
The economist said the state government can bring in its own legislation to safeguard the interests of the state.
"The state government has to think -- do they surrender the (fiscal) autonomy. The residuary powers that the state enjoys under its special status will automatically go under the GST. For safeguarding those interests, the state can bring its own legislation," he said.

Ali, however, said the government should have come up with a blueprint much earlier.
"I am hopeful, something will come out in the next few days," he said.
He said when the GST is rolled out on July 1, the state may not face immediate impact in the absence of the regime here.
"I do not think there would be immediate impact. It will take some time for the transition to the new tax regime. The business is going on, it won't stop. There won't be any short-term negative impact, but in the longer run...Only time will tell," he said.

The business community in the valley has vowed not to allow the implementation of GST in Jammu and Kashmir in its present form and asked the state government to spell out alternative measures to be taken by it from July 1 when the new tax regime comes into effect in the country.
"Kashmir Chamber of Commerce and Industry (KCCI) will not allow the implementation of GST in the state in its present form as it compromises the financial autonomy and special status of the state. For that purpose, the Chamber will take all the measures at its command to prevent its implementation," the oldest business body said in a statement here yesterday.

The state's main opposition party - the National Conference (NC) has also said it would fight "tooth and nail" if the new tax regime is applied in its present form.
Following the opposition, the state government called an all-party meet, shortly before a special session of the legislature on June 17.
The assembly was, however, adjourned after the all-party meeting failed to evolve a consensus over the issue.
The government has since announced constitution of an all-party panel to discuss the issue.