Clamour grows louder for abolition of toll tax in state: GST Effect

Even as the ruling dispensation has given the excuse of Rs 900-crore revenue loss to the state exchequer on account of abolition of the toll tax at Lakhanpur, clamour has gone louder against the charging of the toll tax after the introduction of Goods and Services Tax (GST) in Jammu and Kashmir.
The state government, however, has maintained a silence on “net profit” to Jammu and Kashmir in terms of “divisible pool of taxes” from the Centre under the GST.
The state government has also remained non-committal over doing away with the toll tax being charged at Lakhanpur — the gateway to J&K —following the serious differences between industrialists and traders over the issue.
While traders want immediate abolition of the toll tax levied on goods, the industrialists argue that the practice should remain in place because it would open the floodgates for “outside traders” to sell their products directly in the state that has the potential of causing a huge loss to their (state industry) business.
“In the existing system, there will be no growth in business activity. Rather, there will be further deterioration of trade in the state. The main loser of the existing set up, if it (toll tax) continues, will be consumers and small traders. If the government is giving the reason of revenue losses to it by the abolition of the toll tax, why it is shying away from disclosing the net profit to the state from pool of taxes in the form of compensation by the GST Council?” Neeraj Anand, president Chamber of Traders Federation (CTF) said.
The GST Compensation Law provides for compensation to states that incur revenue losses because of the implementation of the GST in first five years.
“The state government must come clean on the net revenue profit to J&K. The incentives to industry should continue and we are not against it but there is no logic of charging toll tax from traders only. The entry tax for unregistered (outside J&K) traders has been abolished under the GST and now there is no difference between them (outsiders) and local traders. They can easily do business in the state. Our demand is that the government should abolish the toll tax on registered traders and impose entry tax on outside state traders to sort out the issue,” Anand said.
Zorawar Singh Jamwal, chairman of the Team Jammu, also pooh-poohed the claims of “one nation one tax” by introducing the GST and said the decision of the state government to continue with Lakhanpur Toll Plaza was “a big slap on the face of the BJP”.
“J&K is an integral part of India. The imposition of any separate tax other than the GST defies the ‘one nation one tax’ theory which is not acceptable,” he added.
Harinder Gupta, state general secretary of the BJP, said there was no justification of continuing with the toll tax after the implementation of the Goods and Services Tax (GST) in the state.
“As per the new tax system, no tax can be imposed after the introduction of the GST. There is no justification of charging the toll tax from the traders now. It will be in the larger interests of the common man. The industrialists have certain reservations with regard to the abolition of the toll tax which needs to be addressed,” Harinder Gupta said.
Mohammad Javed Khan, Excise Commissioner J&K, said the revenue generation from Lakhanpur Toll Post is around Rs 900 crore. “The abolition of the toll tax is a policy decision and will be taken at the civil secretariat level,” he added.