The Integrated Goods and Services Tax (Extension to Jammu and Kashmir) Act, 2017

The major revenue source of a country is tax. Government has different sources to levy tax on goods and services of a country which is an important source to levy tax to the government. Though tax is levied from all states in India due to the special status of limited autonomy conferred to Jammu and Kashmir in accordance with Article 370 of the Indian Constitution, the Indian Government had no authority to interfere in the core administration of Jammu and Kashmir. But on the removal of Article 370, Indian Government had decided to levy tax from J&K through the enactment of The Integrated Goods and services Tax (Extension to Jammu and Kashmir Act 2017. The act came into existence on 8th July 2017 and it had amended the integrated goods and services Tax Act 2017 for the tax levy extension in Jammu and Kashmir.

The enactment was subject controversies and then Finance minister Mr Arun Jaitley confirmed in the parliament that the Act is passed in the interest of the majority of people in J&K where major population consists of traders. He also stated that the special status of the people of J&k were not an impediment to economic growth and this enactment would ensure economic integration with other states in the country.

The main objective of the enactment is to have and ensure tax levy on interstate supplies of goods and services pertaining to the provisions of the act and the act is concise only with three sections yet clearly defines its commencement, extension, repeal and saving clauses. CGST and IGST are currently applicable to the J&K by virtue of this Act.

Section 2(1) of the act clearly states the extension of rules, regulations, schemes and ordinances made by the Central Government in J&k. Section 2(2) states the omission clause of “except the state of Jammu and Kashmir”. Section 3 states the repealing of Integrated Goods and services Ordinance 2017 and Section 3(2) provides the saving clause of the retrospective effect of the ordinance subject to the provisions of the current Act irrespective of the repeal section.
This act is one of the landmark enactments in India where the J&K economy is be brought in and merged with other Indian States and there by bringing them to mainstream economy of the country. This Act empowers great economic reform that aims at the greater economic or revenue growth of the country without any distinction between Jammu and Kashmir and other Indian States.

Amidst all political debates, and controversies if the provisions of the act is properly implemented it would definitely give a peak rise in the revenue of the country as Mr Arun Jaitley had already stated in the parliament that there will be steady increase in the trade of J&K as it is also a consumer state and majority of the revenue of the state depends on trade and it would be beneficial for the traders irrespective of any interstate boundaries.

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