Normal life was affected as shop and business establishments remained closed and very less number of vehicle plied on the roads in Kashmir valley due to a daylong strike called by traders against proposed implementation of Goods and Services Tax (GST) in the state.
For the Mehbooba Mufti government, which is struggling to contain the street protests in Kashmir, the adoption of the GST has become a nerve-racking challenge with concerns being raised that the new tax system, aimed at integrating the states with the union fiscal system, would lead to an erosion of the state's fiscal autonomy and deal yet another blow to Jammu and Kashmir's special status. The traders have threatened to hold sit-in against the new tax regime.
Hinting that Opposition to GST implementation would create problems for the State, Beigh to Consultative Group of Thursday that it would open a Pandora's box. Terming it a historical moment he said after GST it would be easy to do any business without bothering about the series of taxes.
The government on Saturday rolled-out the Goods and Services Tax (GST) across the country, the biggest indirect tax reform.
While there was expectation that J&K could bring in an ordinance on Friday, on the lines of what West Bengal and Kerala had done earlier, J&K Finance Minister Haseeb Drabu, when contacted by The Indian Express, said they were trying to bring in a modified extension of the constitutional amendment, hopefully by July 5.
Many have asked the Government as to why can't there just be one or two rates under GST instead of the current multiple tax rates (five rates of 3,5,12,18 and 28). The Constitution amendment provides that petroleum products can be taxed under GST as and when GST Council decides.
The government recently set up an all party consultative group under senior PDP leader and former deputy chief minister Muzaffar Hussain Beig who has served also as finance minister in a previous PDP-Congress government. Besides, it will also entail amending Section 5 of J&K Constitution which can't be done.
According to Drabu, non-implementation of GST in J&K will likely have fallouts.
"The government which blinks will never be able to bring reforms".