Levy of Tax on Services in Jammu and Kashmir: A Contrast with Rest of India
Excise and Customs Reporter, Vol. 201, pp. 4SF-14SF, January 2014
11 Pages Posted: 30 Jan 2014
Date Written: January 13, 2014
Abstract
Under the constitutional precincts, the State of Jammu & Kashmir has a special status in so far as the application of Parliamentary laws is concerned. ‘Service Tax’ levied under the provision of Finance Act, 1994 by the Parliament is not applicable to the Jammu & Kashmir and in view of the constitutional scheme the State of Jammu & Kashmir levies its own tax on services. This article examines the relevant constitutional and legal provisions pertaining to the levy of tax on services in the State of Jammu & Kashmir.
This article is divided into four parts. The First part deals with the constitutional provisions relating to levy of Service Tax in India in general making particular reference to the constitutional scheme which enables the Union Parliament to levy tax on services. The Second part, the wake of special constitutional status granted to the State of Jammu & Kashmir and the unique devolution of powers granted to its Legislative Assembly, revisits the constitutional provisions relating to the levy of tax on services in the State of Jammu & Kashmir. The Third part examines the legislative scheme under which the levy of tax on services is actually executed at the ground level in the State of Jammu & Kashmir while the Forth Part makes a comparison of the legislative provisions relating to levy of tax on services in State of Jammu & Kashmir as contrasted with those applicable in the Rest of India.
Upon a comparison of the relevant constitutional and legal provisions it is concluded that the levy of tax on service in the State of Jammu & Kashmir is at significant variance and marks a stark departure with the service tax regime applicable to the rest of India. The unique position which the State of Jammu & Kashmir occupies under the Constitution of India is the prime impetus for the contrasting regimes.
Keywords: Service Tax, Tax on Services, India, Jammu & Kashmir, Legislative Autonomy
JEL Classification: H25, H29, K34, K39, P16
Suggested Citation: Suggested Citation