Jammu and Kashmir joins the GST regime

Jammu and Kashmir joins the GST regime

Earlier Jammu and Kashmir was the only state which failed to meet the June 30,2017 deadline for the GST rollout.Now even Jammu and Kashmir has come under the GST regime along with the rest of the country making the statement correct in true sense "one nation, one tax regime. The Article 370 of the Constitution of India and Section 5 of the Constitution of Jammu and Kashmir grants special autonomous status to the state of Jammu and Kashmir. The Taxation rights for Jammu and Kashmir are with the state Constitution, and not in the seventh schedule of the Constitution of India. This is whythe Service Tax levied all over the country since 1994 is still not applicable in the state of Jammu & Kashmir. The state levies its own taxes for services provided. The state government of J&K could join the GST regime and integrate theirrevenue with Goods and Services Tax,provided they pass two separate bills in their state assembly.The J&K State Assembly had to passa legislation stating that the two laws viz. Central Goods and Services Tax (CGST) and Integrated Goods and Services Tax (IGST)will be applicable to them. In addition to the state assembly approval , it also needs approval from all the States GST lawof India. This would further require the Central government to amend the CGST and IGST law. And extend itsapplicability to the state of Jammu and Kashmir which means to the whole of Nation. Even after theentire opposition expressed apprehension and boycotted the proceedings over GST, Jammu and Kashmir Legislative Assembly passed the state GST Bill 2017 on 7th July,2017 and became the last state of the country to join the new tax indirect tax regime.Finance minister Haseeb Drabu assured that the state government would ensure enough safeguards and GST would not compromise on Article 370 and Section 5 of J&K constitution in any way. Unlike the rest of India, Jammu and Kashmir has got a special constitutional status, so it had to adopt a different procedure for introduction of the GST. Two ordinances relating to the application of central GST (CGST) and integrated GST (IGST), which deals with inter-state commerce, in the state were passed and were made applicable in Jammu and Kashmir from Saturday i.e. 8th July,2017. Compiled by CA Ankita Khetan