Jammu and Kashmir government has formed a high-level committee to look into the issues, including the drafting of legislation, pertaining to joining the Centre's proposed Goods and Services Tax (GST) and asked the panel to submit its report in three months.
"In supercession of all previous orders on the subject, sanction is hereby accorded to the constitution of a High Powered Committee... for drafting the legislation with regard to joining the proposed Goods and Services Tax in India and its extension to Jammu and Kashmir state (proposed Constitutional Amendment Bill)," an order, issued by the government earlier this week, reads.
The Committee, which shall be serviced by Finance Department, has been asked to submit its report with a period of three months.
The committee was formed on December 7, 2016 and has up to March 6, 2017 to submit its report.
"The committee shall draft the legislation with regard to proposed GST in the state while paramounting the measures which can protect the special Consitution(al) position and taxation powers of the state being enjoyed by it," the order said.
The State Legislature is likely to meet in first week of January next year for annual budget session.
As the session is expected to be one-month long, the government will either have to take the ordinance route or call a special session of the Legislature for passing the GST Bill if the committee submits report within the stipulated time.
It will be a difficult situation for the PDP-BJP coalition government to join, or avoid, the GST regime.
Finance Minister Haseeb Drabu, who is from PDP, has in the past said the state of Jammu and Kashmir should retain the autonomy in taxation as is being enjoyed by the state at present.
On the other hand, BJP would like the Constitutional Amendment pushed through as early as possible.
The central government is pinning hopes on quick resolution of the "difficult issue" of tax jurisdiction with states and expecting the GST regime will be rolled out from April next year.
Union Finance Minister Arun Jaitley said the GST implementation is bounded by a calendar deadline as the Constitutional Amendment provides that the existing indirect tax regime can continue only till September 16, 2017.
Financial Commissioner Planning, Development and Monitoring department will be chairman of the committee which will include Commissioner-Secretary Finance Department, Secretary Law Department and Commissioner Commercial Taxes Department as members, the state government order said.
"The committee shall invite Advocate General Jammu and Kashmir as a special invitee as and when required.
The committee may co-opt any other officer as member as it may deem fit," it added.