J&K will have to pass spl laws to make GST applicable

Jammu & Kashmir will have to pass special laws to be able to implement the Goods and Services Tax as its current Constitutional status does not mandate the applicability of the new indirect tax reform in the state.

The Central-GST (CGST) and Integrated-GST (IGST) Bills, introduced in the Lok Sabha on Monday as part of last legislative exercise in Parliament before the tax regime is rolled out from July 1, extend to the whole of India expect J&K.

While service tax is levied all over the country since 1994, it is not applicable in J&K. The state levies its own taxes for services provided in the state.

This is because Article 370 of the Constitution grants special autonomous status to the state and Parliament of India has power to make laws only on defence, external affairs and communication related matters of the state.

As a result, once CGST and IGST bills are passed by Parliament, the J&K Assembly will have to pass a legislation saying the two laws are applicable to them, official sources said.

This approval by the state assembly will be in addition to the requirement of all states to approve the State-GST law.