J&K is attempting economic suicide by not approving GST Bill: Govt sources to ET Now

If there were not enough problems to tackle in J&K, there is another in the works that could lead to an economic plunder, and one the Centre believes is the state government's own doing.

Senior government sources in the Centre tell ET Now that J&K is attempting an "economic suicide" by not approving the GST Bill.

Once the GST is rolled out pan India, it will subsume the central excise duty, and thus the J&K government will no longer be able to levy it and collect a share of it. What's more, the state will lose the right to devolution of taxes to state. The latter will deplete J&K's coffers, said a senior official in the finance ministry.


And the consumers will suffer too, and will have to pay for double incidence of taxes. For example, in the absence of GST, there will be no input credit available on sales tax. Also, goods being brought in from outside of J&K will also be taxed unlike the rest of the country and that in all probability will be passed on consumers in the state. This will make goods and services far more expensive in J&K as against all other states.

J&K's ruling People’s Democratic Party, which has alliance with BJP in the state, is not passing the GST Bill as it fears losing fiscal autonomy and its powers under Article 370.

The state's finance minister Haseeb Brabu has failed to convince the assembly to pass the GST Bill.

Article 370 in J&K, which was laid down in 1949, limits the Centre's jurisdiction in the state to defence, external affairs and communications. Laws passed by the Centre are applicable in J&K only if they passed by the state assembly.