J&K Finance Minister for strong IT backup for efficient Tax reforms

 January 8(Vijay Kumar) –  Jammu and Kashmir Minister for Finance  Abdul Rahim Rather while outlining the reasons for adopting the most progressive Goods and Services Tax (GST) taxation regime in India, has said that the State of Jammu and Kashmir has been pioneering the progressive legislations and in many cases has legislated innovative laws for implementing tax reforms in the State.

Addressing to a galaxy of Finance Ministers from various Indian States, representatives of the Government of India and officers from different states of the country at the first meeting, during the new-year 2010, of the Empowered Committee of State Finance Ministers held for two consecutive days on January 7 and 8 in New Delhi.  Rather while citing various examples informed the Committee that the State Legislature and the policy framers have been conscious of the vanishing thin partition between the Goods and Services and putting the concept of integrating Goods and Services into a single Legislation which actually was in place way back in 1997. The concept of Tax on Goods and Services, as such, was not new to J&K, he emphasized.

The meeting was chaired by the Minister for Finance, West Bengal, Dr. Asseem Das Gupta.

The 1st marathon meeting of the Empowered Committee of State Finance Ministers was held in New Delhi under the Chairmanship of Finance Minister of West Bengal, Dr. Aseem Das Gupta. The methodology to be adopted for determining the RNR, (Revenue Neutral Rate) was debated at length in the first two sessions yesterday. Other issues regarding switchover to Goods & Services Tax (GST) were discussed today in the meeting.

The Finance Minister, opined that the national services sector has expanded at a faster pace in the first seven months of the current fiscal year vis-à-vis the corresponding period of the last fiscal, the situation offers the best opportunity to broaden our tax base by switching over to GST while the trends of steady growth continue. He, however, cautioned that this ideal system should have ideal settings and, therefore, use of advance technology in terms of modern techniques and strong IT backup for efficient administration of the tax system and better service delivery to the tax payers, remains a sine qua non. Other tools for sharing of information, online facility of filing returns, making e-payments, de-mating of statutory forms and simplification of procedures have to be put in place before embarking upon the new tax regime, he added. He said that the State of Jammu and Kashmir has already geared up to ensure that these steps are taken in advance to facilitate the working of the Department for providing hassle free services to the dealers.

With regard to the adoption of modalities for finalizing RNR,  Rather suggested that a committee of experts within the Empowered Committee be constituted to examine the issue thoroughly so as to suggest a rational rate acceptable to all stakeholders. He observed that any hasty decision in this regard can have serious consequences which can jeopardize the actual roll out of GST in the country. 

The Minister also deliberated in detail on other issues relating to SGST, IGST, ITC, Entry Tax, etc. relevant in the context of taxation matrix of the State of Jammu and Kashmir. He stressed upon the abolition of purchase tax that was presently resulting in export of tax from producing States to the consuming states like Jammu and Kashmir. He added that this tax needs to be subsumed in the GST as per the commitments already made. He reminded that CST also needs to be phased out as per the schedule already agreed upon by the Empowered Committee at the time of introduction of VAT.  Rather hoped that the interests of the State of Jammu and Kashmir will be kept in mind while finalizing the IGST model.

Concluding his address, the Finance Minister stated that it was his considered view that the Empowered Committee can prove as an effective body to usher in a successful GST regime in the country like the successful implementation of VAT about half a decade back, it succeeds.

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