Fear and confusion are rattling Kashmir, and for very different reasons than the usual sorrows of the valley. Kashmiri artisans are already scared of the future of the Goods and Services Tax (GST), in the state. Many are also perplexed at how the ruling power, the People’s Democratic Party (PDP), itself has passed the GST, under the assumption that ‘J&K is a consumer state and GST being a destination-based tax, the revenues of the state would increase,’ as a result of its implementation. Nonetheless, the legislature supposedly passed the bill during the absence of the opposition—or its felicitous boycott of the bill—in the state legislative assembly.
The Journey to GST in Kashmir
The journey to the implementation of GST in Kashmir is an unusual and alarming event. It exposes the myth that Kashmiris, can, should or will be allowed the right to self-representation and self-determination. Mr. Omar Abdullah of the National Conference (NC), and the Congress have clamored at the Lok Sabha against the extensions of the Central Goods and Services Tax (CGST) and the Integrated Goods and Services Tax (IGST) bills to J&K. On the other hand, Mr. Nayeem Akhtar of the PDP has described this as the ‘biggest internal confidence building measure from the Centre.’
The NC believes GST in Kashmir to be the first step towards the abrogation of the state’s special status under Article 370, which brokers its political and economic autonomy. Meanwhile, the recent lead speaker of the Congress at the Lok Sabha, Dr. Shashi Tharoor, has especially emphasized on how the GST bill in the valley impinges on the state’s autonomy, and sows the seeds of the alteration of the Centre’s relation with the state of J&K. Kashmir derives is power of taxation, says Dr. Tharoor, from its internal constitution, while the Centre derives the same from article 246, of the Indian Constitution. Furthermore, no protection ‘commensurate with its special status,’ has been granted to Kashmir, adds Dr. Tharoor. To add to the state’s existing woes of terrorism, he concludes, the Government must have ensured that Kashmir does not become a victim of the Finance Ministry’s terrorism.
Meanwhile, the J&K Chief Minister, Ms. Mehbooba Mufti, has been criticized by the NC and others for pursuing a fiduciary restatement of the bill with the Centre—seeking an exemption for the medium and small industries, such as handicrafts, dry fruits, and tourism—as a passing afterthought. By the first week of August, Kashmiris have taken to the streets to protest the GST bill, which they fear will have debilitating effects on the artisans, and will in fact ‘kill Kashmiri handicrafts.’
Can Resettlement Rights Be Bartered with Tax Exemption?
With the tax on animal dyes, jute, cotton, needles and other sewing materials having risen to 18%, Kashmiri handicrafts are being outcompeted by Chinese goods. A recent report by Majid Maqbool claims that handicraft exports have dwindled from Rs. 2,300 crores to 1,100 crores—an economic malaise that GST can only aggravate. The produce of the last three years of the handcrafts industry is stacked up in inventories, yet to find purchasers. The going rates of papier-mâché exports, for instance, will now be after a compounded GST of 30%—combining the GST on raw materials and retail price—, while the carpet industry is also about to suffer huge losses, in comparison from its earlier days of the 0% VAT regime.
Quite clearly, there are two distinct economic problems, here—GST being only a very recent one. The pride of Kashmir—its shikaras, jheels, flower-sellers, wood-joiners, handicraftsmen and carpet sellers—have been India’s endangered species for several years prior to the rollout of the so-called ‘Good and Simple Tax.’ The valley has not been hospitable to its own industry, just as it has not been to tourism or the resettlement of Kashmiri Pandits, who still recount their exodus of the nineties.
Meanwhile, artisans and trade leaders representing the Jammu and Kashmir Coordination Committee against the implementation of GST, have planned a protest sit-in, at Lal Chowk, on Tusday, August 8. The house-arrest of three of its leaders, Muhammad Yasin Khan, Shakeel Qalandar and Dr Mubeen Shah, by the state government is a confirmation that the PDP is toeing the central line, hoping the Kashmiris will be consoled merely by the state’s efforts to pursue with the GST Council, the case of exemption to small and medium industries. Last week, Lal Chowk also witnessed the funeral ceremony of a spinning wheel—what once used to be the great symbol of swadeshi, nationalism, khadi and nonviolence, in India.
At a time when Kashmir has lost hundreds of eyes in protest movements, with its economy seemingly maladjusted to lose several more charkhas, is a barter brewing somewhere—that is, an exchange of resettlement rights and the right for members of other states to purchase property in Kashmir against salvaging the livelihood of Kashmiri artisans?
In 2014, a less known NGO, We the Citizens, had filed a writ petition, seeking the elimination of Article 35A, which guarantees that only state subjects have the right to purchase and occupy property in Kashmir. The petition was countered by the J&K Government, but the Central Government has remained quiet on it, ever since. Also, Ms. Mufti has warned the Centre that if it tries to tamper with Article 35A, there will be none left in the valley to raise the tricolor. That however was the case before the GST rollout. Whether by a grand design or absolute inadvertent political consequences, GST is proving to be a major inroad by the BJP in Kashmir. To regain the political support of the hungry artisans of Kashmir, and broker an exemption for their businesses, Ms. Mufti may be tempted to make a concession to the Centre. And, resettling migrants from other parts of India may not be far from her mind.
Be that as it may, the new tax regime in Kashmir has set an example of how the chief of the early opposition to the passage of the bill has come from the rest of India, while ironically the state’s own ruling party has fallen in line with the dogma of one-nation-one-tax. Kashmir (and the rest of India) have often demanded plebiscite for where its people really belong. By now, Kashmiris should be able to better appreciate the fact that India too understands and can righteously argue for the state’s welfare. For, India is not merely defined by its government, but is subservient to profounder principles of constitutional dialogue, that it keeps begging Kashmir into.