With the major barrier crossed on GST, J&K is mostly likely to join the GSTN by Monday. If everything goes by the script, the House will pass the SGST law later this week.
The cabinet, that met immediately after the resolution was adopted, has formally approved the resolution and it has been has been to the Raj Bhawan, sources said.
Official sources said the system is that once the governor approves it, as the head of the state, the government will forward the concurrence to the Home Ministry that will eventually send it to President of India. The Rashtrapati Bhawan is expected to issue the formal constitutional amendment provisions to the state on Thursday, they added.
“The House gave its concurrence but it will not get implemented automatically unless the President invokes his rights under Article 370 and extends the provisions,” a senior officer privy of the developments said. “Then we will have to have a law that will legislate on basis of the provisions of the presidential order.”
Officials said the basic draft of the SGST law is ready but it will have a final revision once the presidential ordinance is formally issued. The law will accommodate the processes and the provisions of the order.
After two days of discussions on the subject, Finance Minister Dr Haseeb Drabu said the state will retain the entire constitutional and the legislative powers that it already has. In certain cases, he said, certain constitutional provisions eroded earlier will survive strengthened.
Drabu said the new system will take some time and there will be issues on the implementation level despite the fact that almost ninety percent of the trade is beyond the purview of the GST because of modest turnover. One of the compelling factors for joining the GSTN is that trade will suffer massive losses in it’s de-linkage with a larger market.
Offering details, Drabu said there was drop by fifty percent in the incoming truck traffic from 2000 trucks to 1000 in July as the outgoing truck number fell by 66 percent from 300 to 100. “Our earnings have dropped from Rs 82 crore on July 4, 2016 to Rs 40 crore on July 4, 2017,” Drabu said. “If this happens in four days what can be the long term impact?”
His assertions in the House, first in assembly and then in the council, suggested that the government has had detailed discussions with the central government that was not unwilling to address its ally’s key concerns, both on constitutional issues and the subsequent administrative issues.
Drabu ruled out the possibility of presidential order on extension of GST taking a parallel route other than Article 370. He said there will not be any change in either the Section 5 of the state constitution or the Article 370 of the Constitution of India. Some lawmakers had registered their concern over the possibility of GST Council, constituted on basis of a Lok Sabha law, becoming a new system to extend central laws and systems.
On the issues related to J&K – within the GST Council, Drabu said the J&K representative, will have absolute powers. This will be the only state that will enjoy such powers, it suggested.
Drabu said all exemptions, remissions and the subsidies will continue as long as they are. The only difference would be that government will create a model that will manage preventing the breakage of GSTN chain.
In the state legislative council, Drabu said, state will have its own appellant authority. He said the GST would be implemented invoking Section 5 of the state constitution and not Article 246 – the provision of Constitution of India that guides GST implementation in the rest of India. He said the effort is to strengthen certain eroded parts of the state constitution using this presidential ordinance.
Incidentally the passage of the GST related resolution took place at a time when Kashmir was on strike on a call sponsored by the anti-GST trade. Parts of the city were under restrictions too. Some leaders from the trade were either arrested or restricted to their homes.
Most of the opposition lawmakers who spoke on the law did participate in voting but opposed the resolution in the state assembly. In the council, the opposition benches were empty since morning.