India moved a step closer to becoming a unified market in line with the federalist vision of the architects of its Constitution with the tabling in Parliament on Monday of the GST Bill, which extends pan-India except to Jammu and Kashmir.
Union Finance Minister Arun Jaitley introduced the Central Goods and Services Tax (CGST) Bill, 2017, along with three other related bills in the Lok Sabha.
The GST will subsume various indirect levies of the Centre and states like service tax, excise duty, octroi and value added tax (VAT).
The states will have to get the state GST Bills passed by their respective assemblies.
Jammu and Kashmir will need to pass all four bills in its state assembly, on account of its special powers on taxation under the Constitution.
Jammu and Kashmir is the only state in the country with powers to tax services.
State Finance Minister Hasib Drabu had represented to the Empowered Committee (EC) of State Finance Ministers on GST last year, following which the EC agreed that GST will not be extended to the state in the current form.
Drabu had submitted that the state’s special taxation powers need to be protected while rolling out GST.
Given Jammu and Kashmir’s special status, of particular concern to the state government is that once the new tax takes off, the GST Council becomes more powerful than state legislatures, which requires to be resolved, Drabu said.
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