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Updates from 28th March, 2017
Jammu and Kashmir’s Finance Minister Hasib Drabu has said that the GST Bill will not apply to the state in its present form. J&K is the only Indian state with special powers of taxation, including the exclusive power to levy tax on services. Even as the Union Finance Minister Arun Jaitley gets ready for the final push to the GST Bill, the state of J&K still has to pass all four bills in its state assembly before the new tax laws can apply there.
Mr. Drabu is also worried that when GST goes live and the GST Council becomes the de-facto tax body in the country, it may undermine the power of state legislatures. If GST is implemented in the Kashmir region, then neither the state’s legislature nor its finance minister will be able to make any unilateral changes to the tax laws. This is a contradiction of the right to financial autonomy that the state of Jammu and Kashmir enjoys under the Article 370 of the Constitution.