Jammu and Kashmir Finance Minister Haseeb Drabu on 12 June assured the business community that their interests will be fully protected under the new GST regime, saying the government would not compromise the fiscal autonomy of the state under the regime.

"We have made changes in federal relations with the government of India. Other states draw powers to tax from the Constitution of India, while we draw our powers from our own Constitution. Those legislative powers have not been compromised, so there is no question of compromising fiscal autonomy," he said.

The state finance minister was speaking at a meeting attended by representatives of business chambers of Jammu and Kashmir regions, Kashmir Traders and Manufacturers Federation, Kashmir Traders and Manufacturers Association, Kashmir Restaurant Owners Federation, Hoteliers and other business leaders of the state.

Drabu said it is for the first time in the history of Jammu and Kashmir that a constitutional amendment required to extend a central law to the state will be debated in the state assembly.

"People of J-K must understand what is at stake, which is why we are holding a special assembly session," he said.

He said the state government has set a precedent of discussing policy issues with stakeholders and in the assembly where people sent their leaders to take decisions which impact their lives.

"Article 370 is safe and modalities are safe. You should recognise that we are setting a precedent. If anything, it is my understanding that the union is sharing sovereignty with the states, in the taxation space," he said.

The finance minister said while the state can defer the GST implementation, "it will impact the business of Kashmir more than the government".

"In the absence of GST in J-K, no one would want to trade with us.

And if they do trade, the consumer will be penalised through double taxation. Let me assure you that no one will be put to a disadvantage under the GST regime. In fact, J-K will be the first state to do GST refund for shoppers on handicrafts," he said.

Drabu said the GST system is running successfully in 198 countries.

"Let me assure you that there can be no better system for traders than GST. Besides, the system of exemptions will also continue in J-K. Modalities will be worked out in coming days as there is uncertainty all across India and J-K is not unique to it over… other operational issues which will have to be resolved," he said.

He said the implementation of GST is being discussed since 2002 and the law has evolved over the years.

"Earlier, the GST was supposed to be a single rate, single tax with no GST Council. Today, not one decision has been taken without the consultation of other states which is why I have repeatedly said that GST council is India's first truly federal institution," he said.

The finance minister said the GST will ease the businesses as inspection audits will fade away and assessments will be done by traders.

"States have huge power today. Our government has done nothing in the constitutional amendment which takes away the legislative powers of J-K," he said.