Goods and Service Tax (GST) collection in the Kashmir valley has been marred by the Internet shutdown, which will run into its 6th month soon.
Sheikh Ashiq, president of the Kashmir Chamber of Commerce and Industry (KCCI), while speaking to The Logical Indian, estimated that over 50% of Kashmiri business people have been unable to file their GST returns since August 5 â when the J&Kâs special status was abrogated and the region was bifurcated into two union territories.
Even as the Central government extended the last date for filing returns to December 20, an overwhelming portion of the populace is still struggling to find the means for completing the procedure.
Mohammed Jameel Khan, a resident of Jammu said that the condition of GST filing in his region was poor. âThe collection of GST is very little this year. In Jammu, it has fallen to Rs 25 crore in September, shockingly lower than Rs 164 crores that were collected in July this yearâ, he said quoting a media report, âJammuites still have it better due to the availability of broadband services, but the situation in the Valley is very bad.â
There have been protests in the region of Jammu over the difficulties being faced by the locals during filing GST returns. âThe situation is barely tolerable for anyoneâ, he remarked.
The Launch Of GST in Kashmir: When & How?
The goods and service tax (GST) was introduced into the Indian taxation system in July 2017, but it excluded the erstwhile state of Jammu and Kashmir from its purview due to the special protection given to the state by the virtue of Article 370.
Nevertheless, on July 7 2017, former President Pranab Mukherjee gave his nod to the application of the goods and service tax to J&K after the PDP-BJP government passed a resolution in the assembly under the chairwomanship of Mehbooba Mufti.
But ever since the former federal state was divided into two separate union territories â one with a legislature (Jammu and Kashmir) and one without a legislature (Ladakh) â there have been a lot of questions on whether the state goods and services tax (SGST) will continue or not.
As no official statement has been given over the continuance of SGST, experts and native residents/businesspeople are only left speculating the possibilities. Taking a cue from other Indian union territories (UT) like Delhi and Pondicherry â who have a cabinet of their own, the new UT of Jammu & Kashmir might find its system of SGST intact but Ladakh may be seeing an overhaul in its tax collection order.
Nasty Quandary: No Internet Or Resources, But Penalties Levied
The Logical Indian contacted two chartered accountants (CAs) running their own accounts and tax services firms in Srinagar, to understand the situation on the ground.
Yasir Mehfooz, a young accountant, almost bankrupt due to the blockade of Internet in the valley, broke down the entire procedure of GST filings and how the current crisis is a âcruel jokeâ for Kashmiris.
âEver since the Centre shut off mobile calling and Internet in the region, people have been unable to access their GST portals following August, to file returns. This has left the returns for the month of July pending and as a consequence, the arrears accumulated have also given rise to several penalties that Kashmiris may be forced to payâ, he said.
âYou can imagine, people have penalties piled up against their names for the months of July, August, September, October, November and Decemberâ, he added.
Altaf Lone, another chartered accountant who was in New Delhi solely for accessing the Internet, commented on what a herculean task it was for him to finish filing his clientsâ returns in the limited days he had.
In Kashmir, many traders have found their GST identification numbers (GSTINs) blocked from generating e-way bills â that are a lifeline for any registered tax-paying business.
âThe generation of e-way bills has been barred due to the non-filing of returnsâ, Altaf Lone said.
As per the GST council guidelines, with effect from 2nd December, if returns remain unfiled for more than two months, the process of generating e-way bills gets automatically blocked. This is a recent addition to the new indirect tax regime that looks to crack down on tax evaders and defaulters. However, in the case of Kashmir, the absence of Internet has forcibly incapacitated people and pushed their names into the list of âtax defaultersâ.
This development was discovered by the locals who lined up in the District Commissionerâs (DC) office to generate their e-way bills. âThe bill takes 2-3 minutes to be created, but business owners have been standing for hours in chilling temperatures in lines that run all the way down the road to finish a trivial yet important taskâ, Lone informed.
An e-way bill is an electronic bill that records the movement of goods. A registered business cannot transport goods whose value exceeds Rs 50,000, in any vehicle without an e-way bill. When it is generated, a unique E-way Bill Number…
