How Recent GST Reforms Will Shape J&K's Economy

2025-09-04 03:14:30

(MENAFN- Kashmir Observer)
Representational photo

By Malik Daniyal

The Goods and Services Tax (GST) Council's recent overhaul, which compresses rates into a two-slab system, 5% and 18%, with a 40% levy for luxury and sin goods, aims to simplify taxation and stimulate consumption nationwide.

For the Union Territory of Jammu & Kashmir (J&K), however, the implications are unique, shaped by its fiscal structure, economic composition, and heavy reliance on indirect tax revenues.

Chief Minister Omar Abdullah has warned that the rate reductions could cut the UT's GST receipts by 10-12%. Such a decline is significant for a region already battling revenue instability post-Pahalgam shock.

Without compensatory mechanisms, this shortfall threatens liquidity, public investment, and essential services.

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