Sunday, May 27, 2018
 News Details
Kashmir ‘Defies’ One-Nation One-Tax Regime
Straight Talk

By K B Jandial

Unlike in rest of India, the GST in J&K will not be rolled out on 1st July this year, sending a loud and unambiguous message that J&K is a separate territory ( and quom) which doesn’t welcome ‘Indian laws’ howsoever progressive and pro-consumer these may be.

On Saturday last, an unprecedented parliamentary ‘coup’ was quietly executed by the law makers including BJP within the legislative assembly, supported by ever vocal Kashmiri traders from outside that stalled for the time being introduction of GST bill for which it was specially convened. The Hurriyat Conference too had lent its support to the Kashmiri traders. And the Govt too readily obliged by deferring introduction of GST bill and both the House were adjourned sine die.

More surprising is the fact that all this has happened even when strong man like Modi is the PM and ultra nationalist party BJP is in the Government, both in the state and at the centre. Is their striking silence is a sign of agreement or political expediency? But Jammu is stunned over this unique development.

The major opposition parties -NC with Congress, decidedly scored a major political victory in stalling introduction of the J&K GST bill in the Assembly and thus also prevented extension of ‘The Constitutional (One Hundred and First Amendment) Act, 2016’ which has been made a controversial legislation for impinging the fiscal autonomy of the State. The totally misinterpreted Article 370 of Constitution of India which grants the special status to J&K is responsible for creating a psychological barrier in Kashmir. This time the PDP-BJP Govt has in a way re-written article 370 by taking the issue of extension of amendments in to the Constitution of India to the State Legislature, thereby creating an advantageous precedent for pro- autonomy parties. This will make extension of central laws into J&K in future difficult, no matter how much useful these might be for the people and the state.

The PDP-BJP Govt has not been caught on wrong foot accidently as it has invited this hype and roadblocks in extension of central laws and amended constitutional provisions to J&K. The Govt has conscientiously taken the route of Legislature for the first time even though neither Article 370 mandates it nor it was the intention of the framers of article (drafted by Ayyangar in consultation with founder of NC Sheikh Abdullah when declined by Dr Ambedkar)

What was the necessity of taking Assembly route for extension of The Constitutional (One Hundred and First Amendment) Act, 2016 when Article 370 Cl 1 (d) says that the provisions could be extended by Presidential order with “concurrence” of the Govt of the State? Drabu and Naeem have attributed the changed course to ensure “transparency and debate by the stakeholders on the issue. Besides the opposition parties, Kashmiri traders were also up in the arm, not as much on the demerit of the pro-consumer new GST regime but more on the political issue of special status and fiscal autonomy of the State. Even Hurriyat which is working for Kashmir’s secession from India too lends its support to traders on this issue.

A leading senior advocate and BJP’s spokesman, Sunil Sethi has very aptly clarified the legal issues connected with extension of GST regime in J&K in his article ‘GST regime and J&K’ (DE 15 June) but unfortunately the law makers and political parties failed to benefit themselves from his legal explanations and instead joined the chorus for non-introduction of the bill that would have benefited J&K consumers. He spiked the bogey of GST law being made out by the vested interest that it impacts state’s fiscal autonomy and article 370 and explained that “the talks on fiscal autonomy of the State are meaningless as the State has surrendered to the Union Government the power to impose tax in the State like CST, central Excise duty, custom by way of Constitutional Amendment order issued by President of India with the concurrence of the State in the year 1958. There is absolutely no reason for the State to suffer losses which is about Rs.1000 Crore per year in case of non-implementation of GST regime in the State.” However, Drabu puts this loss at Rs.5000 crore.

The NC has successfully created suspicion on the new GST regime by linking it with State’s power to tax goods and services. Instead of calling their bluff PDP-BJP Govt itself fell in line and decided to refer the issue to an All Party Committee, most of whom are non-legislators. The answer to NC charge lies in the amended article 246-A that vests legislative powers to State legislature for intra-State taxation for goods and services. The amended Article 246A (1) says “Notwithstanding anything contained in articles 246 and 254, Parliament, and, subject to clause (2), the Legislature of every State, have power to make laws with respect to goods and services tax imposed by the Union or by such State”. Earlier, J&K didn’t have power to tax services which the State will now have. Obviously, Parliament will have the power of taxation on inter-state transaction to maintain uniformity throughout India.

Sunil Sethi has explained that “the Service Tax will be charged by the State Government on behalf of the Central Government and share of it will be retained as per the norms fixed. It is this issue on which controversy is sought to be raised that by surrendering the powers to impose service tax to the Central Government will affect the fiscal autonomy of the State. As is apparent from the above, the same is not the position as the legislative competence will still be vested with the State and fiscal part of it can be easily taken care of”.

Doesn’t A R Rather, a long time Finance minister know all these facts? The State had been associated with GST discussions right from the beginning and Rather himself remained the Chairman of the empowered Committee of Finance Ministers for three long years. Why didn’t he raise J&K concerns and sought their redressal? Since March this year, Drabu is the chairman of Finance Ministers of northern states.

The concern of NC on erosion of State’s fiscal autonomy is quite amusing. The party which has ruled the state for most of the years could not mop up enough resources to even meet the state’s wage bill. Even on development front the state is getting funds in the ratio of 90% grants and 10% loan.

Is the opposition to GST purely constitutional or fiscal? Or it is political? Whatever may be the reasons for opposition and whatever be the response of the ruling parties, the fact remains that unprecedented move of PDP-BJP Govt to take the issue of extension of constitutional amendment to State Legislature was ill-founded and ill-advised. After failing to introduce the GST bill the Govt has set an All Party Committee to examine the proposed Bill and submit its report. If the Govt could not convince opposition parties at all party meeting how can they expect to pass through their draft bill from these veterans from opposition parties? Why PDP appears to be indecisive on extension of these reforms in the face of opposition from NC and congress? Do they too feel that Indian laws should not be extended in to J&K under the prescribed constitutional mechanism of article 370?

The stalling of GST regime in to J&K has strengthened the views of many that mainstream political parties which swear in the name of Constitutions of J&K and India and integrity of India, are responsible for stoking separatists feelings in Kashmir ( not Jammu & Kashmir) The PDP led coalition Govt meekly succumbed to the pressure tactics of opposition and Kashmir Traders, most probably to buy Kashmir’s summer peace. The separatist sentiments that is ruling the roost, won the battle despite clear majority of PDP-BJP in both houses. Why the Govt has buckled under the threats of agitation by opposition which is in the minority in the legislature? Is it because it suited PDP too? They too can claim to be the savior of State’s special status and autonomy and didn’t bow down meekly before Modi led powerful centre which no other Govt had ever done it.

One credible media report (not yet denied) said that PDP-BJP Govt is playing a double game on GST. On one hand, it wants to extend GST to J&K to draw benefits from it but at the same time retain power of taxing goods and services to protect J&K’s special status. The PDP has also allegedly instigated Kashmir’s business community against invocation of GST over dilution of Article 370. Strange, the business community of only one region-Kashmir, is opposed to GST (unmindful of the losses to the consumers to enforce special status) while other two regions-Jammu & Ladakh, may be they don’t matter in political decision making of the State.

NC too didn’t allow coalition partner Congress to extend provisions of 73rd & 74th amendments to J&K to empower the panchayats and urban local bodies. Kashmir leadership is not concerned about the ill effects of such pernicious acts-let the State and its people suffer in terms of empowerment as well as resources, the political agenda must not be compromised even in a situation where the ‘azadi’ sentiments don’t actually bother about autonomy and article 370. How Sheikh Abdullah did maintain his writ, not only in Kashmir but also in other two regions as well during his second avatar as CM from 1975 to 1983, which is considered to be the most peaceful period. He resisted the pressure of some of his aides to revoke some central laws and constitutional provisions extended after his ouster and arrest in 1953. He was a mass leader and mass following. Present leadership is looking for anti India issues to remain relevant.

“Erosion” of autonomy that J&K has under article 370 continued to be the war cry of mainstream parties of Kashmir including Congress giving this impression that extension of Indian constitutional provisions and central laws after invoking the provisions of article 370 are not acceptable to Kashmir leaders. It is a different matter that the extended provisions (which they call erosion) had made the people of J&K beneficial in all respects. The negative mindset of politicians is coming in the way as that they don’t expect (even want) the people of Kashmir (Muslims) to “welcome Indian Laws and constitutional amendments”. It is the same leadership that all through had been feeding the gullible people that no law passed by Indian Parliament would be extended to J&K. And what is actually done is that almost identical provisions are enacted as J&K law by “copy and paste” of central laws with some changes and that make Kashmir “proud” of their autonomy and being different from other states.
By not going with the national law in which J&K too contributed, and enforcing its constitutional and residuary powers to legislate its own tax law, to which it is constitutionally competent, a feeling of separate nation has been stoked in Kashmir on which rests and flourish the psychological feeling of ‘we are other than India’.

Surprisingly, the BJP which all along had held just opposite aggressive views on Article 370 too has succumbed. The catchy slogan of GST- “one nation one tax market” faced a serious roadblock at Lakhanpur beyond which it will be “two nations two taxes”. It is this tendency that stokes feeling of separatism.

(The writer is former Secretary Information, health, transport, CAPD departments and a member of Public Service Commission, feedback: [email protected])

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