RINAGAR: Jammu and Kashmir’s average monthly GST revenue has increased from Rs 300 crore in 2017 to Rs 724 crore by the end of March 2025, with total GST collections reaching Rs 8,680.2 crore in the financial year 2024–25, the Government informed the Legislative Assembly.
Replying to a question tabled by MLA Pirzada Farooq Ahmed Shah regarding the GST Act, the Minister In-charge Finance Department said the Goods and Services Tax Act was implemented in the erstwhile State of JK on July 8, 2017. He said the reform aimed at replacing the earlier multi-layered indirect tax structure with a unified system, reducing cascading of taxes and improving compliance through technology-driven processes such as online registration, return filing, refunds and e-way bills.
The Government stated that the transition to a fully online tax regime initially posed challenges for small and medium enterprises in adapting to digital compliance requirements. These were addressed through measures including the Composition Scheme for businesses with turnover up to Rs 1.5 crore for traders and manufacturers and Rs 50 lakh for service providers, and the QRMP scheme for entities with aggregate annual turnover up to Rs 5 crore. GST Suvidha Kendras have also been established in every district to assist traders with compliance and grievance redressal.
About handicrafts, the House was informed that items earlier exempt from VAT were initially placed under 5 per cent or 12 per cent GST slabs. Following rate rationalisation by the GST Council in September 2025, all handicraft items are now taxed at 5 per cent. Handmade and hand-embroidered shawls continue to attract 5 per cent GST irrespective of sale value, even where textile items above Rs 2,500 attract 18 per cent. The registration threshold has been raised from Rs 10 lakh in the pre-GST regime to Rs 40 lakh, benefiting small artisans. Handicraft dealers engaged in inter-state trade are exempt from mandatory GST registration if annual turnover remains below Rs 20 lakh.
In the tourism sector, the Government said entry tax has been subsumed under GST. Hotels with tariffs below Rs 7,500 are eligible for 5 per cent GST, making tourism services more competitive. The introduction of input tax credit and rate rationalisation has supported the sector, though compliance requirements remain a concern for small operators.
On horticulture, the Government clarified that agricultural and horticultural income remains outside the GST framework. However, value-added activities such as grading, packing, cold storage and processing attract GST. It said compliance challenges have eased over time with awareness initiatives and procedural simplifications, while key agricultural inputs are taxed at concessional rates.
The Minister said that under Article 279A of the Constitution, the GST Council is empowered to take decisions regarding rates, rules and exemptions. In September 2025, the Council carried out reforms aimed at simplification and rationalisation, including easing compliance for zero-rated supplies, facilitating self-declaration-based registration and addressing issues relating to appellate mechanisms and exemptions.
Providing revenue figures, the Government said GST collections in JK stood at Rs 7,272.75 crore in 2022–23, Rs 8,128.44 crore in 2023–24 and Rs 8,680.2 crore in 2024–25. IGST settlements received by the UT amounted to Rs 4,922.57 crore in 2022–23, Rs 5,183.62 crore in 2023–24 and Rs 5,688.94 crore in 2024–25.
The Minister added that GST is a destination-based tax system under which revenue accrues to the state where goods and services are consumed, and said the Union Territory regularly receives its due share of IGST settlement at the end of every month.kashmir life