Since July 8, 2017 – the day when GST was implemented in J&K, it has been observed by tax officials that the state revenue collection in the state dropped down nearly by Rs 1300 crore.
According to the senior commercial taxes department official, “Revenue realisation in states witnessed dip as many of the state taxes are subsumed under Goods and Services Tax. J&K is facing the same situation, besides being import driven economy our revenue losses under GST are among the highest in the country post implementation of the new tax regime.”
As per the official figures, the revenue loss incurred in the J&K state nearly Rs 1307 crore since the implementation of GST reform in the state. Furthermore, the revenue figures have been submitted by the senior officials to the state government and demanding for the compensation from the Central Government.
The senior official further added that according to the provisions of Section 7 of the GST (Compensation to States) Act, 2017, loss of revenue to the states arising on the implementation of Good and Services Tax during the alteration period would be recovered by the central government.
He also stated that the provision of compensation in which he cleared that the payable compensation is to be released by the end of every 2nd month till 5 years from transition and has to be provisionally calculated.
As per the figures of the union finance ministry, it has been observed that J&K is one of the states that has realized revenue losses in several sectors because of the implementation of GST.
The Central government would have to pay the GST compensation to J&K i.e Rs 1307 crore. In respect of GST compensation, the J&K leaves behind the states such as Andhra Pradesh, Arunachal Pradesh, and Tamil Nadu.
The GST was implemented on 8th July 2017 in Jammu and Kashmir which was the last state to implement new reform. The Jammu and Kashmir GST Bill 2017 being accepted by a voice vote in the non-availability of opposition parties which blamed PDP-BJP government of undermining the special status of the state.
Kashmir Economic Alliance, Muhammad Yaseen Khan said, “Our opposition to GST was that it would take away our financial autonomy and make us more dependent on centre. Both our apprehensions have proven right after a year of its implementation,”
By adding that implementing GST was a well-defined reform which helps in developing finance, “PDP government played an active role in the erosion of fiscal autonomy. Business leaders were jailed to appease New Delhi and in return, PDP was dislodged unceremoniously. But all said and done, our state economy is passing through turbulent times due to GST implementation and revenue losses to the government will increase in coming days despite higher tax rates because trade volume has gone down post-GST.”
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