Kashmir will erupt if the government goes ahead with implementation of Goods and Services Tax (GST) which would "erode" the state's special position, J&K Coordination Committee (J&KCC), an umbrella organization of trade bodies and civil society formations, warned the PDP-BJP coalition on Monday. Deciding to come up with a protest program against the GST implementation, the Committee, to begin with, announced a sit-in outside the Assembly on Tuesday when the House is being re-convened to debate implementation of the controversial tax regime. The Committee has asked all businessmen and traders to hoist black flags outside their establishments from Tuesday as a mark of protest against the GST.
"We warn the government and the legislators against any attempt to introduce or pass any order or a piece of legislation to extend the 101st Amendment Act of the Constitution of India to the State in its original or extended form," Siraj Ahmad, convener of J&KCC told a press conference here. He was flanked by former judge, Justice (retd.) Hasnain Masoodi and former chairman Kashmir Chamber of Commerce and Industry, Mubeen Shah.
He said Tuesday's sit-in is aimed at building pressure on the government and the legislators to support "our views and thoughts" on the GST.
Shah said all the Amendments in the Constitution of India since 1954 have been extended to J&K by "deceit" and now the government is trying to justify extension of another Amendment to further "erode" the state's special position.
"We are warning the government against attempting to erode our special position, else the entire population will rise against it," said Shah. "They are doing it (extending the Amendment Act) by deceit again today. The government and legislators will be responsible for this deceit."
He said people would come out on roads if the state's autonomy is "put at stake".
"Nobody including businessmen and traders will compromise the state's autonomy for small gains," Shah said.
According to J&KCC, the GST was against the "spirit" of the state autonomy and would erode its financial powers to pursue its own fiscal as well as public expenditure policies.
The state government finds itself in a tight spot as the Opposition and trade bodies have opposed the GST, saying it would result in handing over the state's powers to collect taxes to the Government of India and erosion in state's special position. At the center of the controversy is the 101st Constitutional Amendment Act that aims at economic integration of states with Union of India and empowers New Delhi to wrest control over collection of taxes on goods and service in the states.
While the state government has been reiterating that it would ensure all constitutional safeguards while allowing extension of the 101st Amendment Act to the state that would allow GST application, it has however failed to explain how it would do so. Several government initiatives like calling an all-party meeting, setting up a Consultative Group and convening a special session of the Assembly have failed to build any political consensus on the matter.
"The government's assertions that it will safeguard state's fiscal autonomy and Article 370 are only to hoodwink people," J&KCC said in a statement, asking the government to explain how it unilaterally started the process of registration of traders under GST regime even before any such Act had been implemented by the state.
While out-rightly rejecting extension of 101st Amendment Act to the State, the Committee asked the government to come up with its own legislation on the tax law that may synchronize with the law passed by the government of India.
Masoodi said the State can follow Canada-model to have its own GST. "Why isn't 101st amendment directly applicable to J&K? This question in itself tells us that our state has special privileges which must continue," he said, asking the state government to come up with its own law.
He said once 101st Amendment Act is implemented in the state, the state government wouldn't be in any position to ask for any safeguards. "Its (the government's) assertions that they will ensure safeguards are factually wrong," said Masoodi. "Any safeguards can be ensured before extension of the 101st Amendment Act."
He said there was nobody opposing tax reforms but it must not be at the cost of special constitutional position of the state.
Noted economist Prof Nisar Ali said so far state government hasn't done any exercise to persuade New Delhi to bring changes in the 101st Amendment Act which will force the government to surrender the powers to collect tax under section 5 of J&K Constitution unlike other states which draw the power from constitution of India.
The Committee also blamed the government for putting on work the state machinery to "malign image and credibility" of leaders and activists.