“J&K (sic) has a different system because of the Article 370 giving it special status. There, the state government has to pass an order on GST, which has to be countersigned by the President,” Mr Jaitley said at the AAj Tak conclave in New Delhi.
He said that at the latest all-party consultative meeting on GST in Srinagar organised by Jammu and Kashmir Finance Minister Haseeb Drabu, some participants had voiced apprehensions that adopting GST would lead to the economic integration of the state with the rest of the country. These people were opposed to such economic integration.
Jammu and Kashmir enjoys special status under Article 370 and draws its taxation powers from the state’s own Constitution. The National Conference has expressed concern over the extending Constitutional Amendment 101, or the GST Act, to Jammu and Kashmir.
“The parties concerned need to reconsider their position and build a consensus on GST, because the consequences of not implementing it would be terrible for the people of J&K,” Mr Jaitley said.
The finance minister said that while the state’s consumers of products from outside would pay tax twice in the absence of GST, goods sent out of the state would similarly attract double levy, making everything more expensive.
Besides, Jammu and Kashmir would not get the benefit of the Centre’s compensation to states on account of the loss in revenue incurred by implementing GST, he said.
“Because of such a situation arising, we could have a scenario where Jammu will want to come into the GST regime, while Kashmir will not,” he added.