Mirror to Economic Strain: What J&K’s GST Share of Just 0.43% Says About Its Economy

By Author | June 29, 2025
Jammu and Kashmir News, GST Recent News – 2025

J&K’s GST Collection Ranked 22nd Nationally

Jammu and Kashmir collected ₹7,175 crore in GST during FY 2024–25. This places the Union Territory 22nd among Indian states and union territories. While revenue has improved slightly, the low share highlights deeper economic issues.

India’s total GST collection stood at ₹16.75 lakh crore. J&K’s share—just 0.43%—falls significantly short of its economic potential.

Revenue Breakdown and National Comparison

The collection included:

  • ₹2,991 crore in Central GST
  • ₹1,954 crore in State GST
  • ₹2,113 crore in Integrated GST
  • ₹116 crore in Compensation Cess

Comparatively, similar or smaller regions performed better:

  • Uttarakhand: ₹20,670 crore
  • Himachal Pradesh: ₹10,352 crore
  • Assam: ₹17,415 crore
  • Goa: ₹7,146 crore (almost equal to J&K)

Even smaller union territories like Dadra and Nagar Haveli (₹4,408 crore) and Sikkim (₹4,063 crore) fared better.

Key Reasons Behind Weak GST Growth

The primary reason is a sluggish economic environment in both Jammu and Kashmir regions. Despite improvements in digital compliance and return filings, actual business activity remains limited.

In Kashmir, inflation, inconsistent tourism, and low industrial investment have dampened business sentiment. Traditional sectors like handicrafts and horticulture are struggling to grow.

A Srinagar-based trader stated,

“Low GST doesn’t mean people are evading taxes. It shows how stressed the economy is.”

Jammu’s Trade Slows; Construction Stalls

In Jammu, trade and logistics, which usually outperform Kashmir, saw slower growth. Wholesale turnover fell, and the construction sector was subdued throughout the year.

Tax officials admit that while more businesses are registering and filing returns, the total transaction value is still low. “Volume and value must rise together,” said one official.

J&K Trails Behind Most Indian States

Top GST contributors for the year were:

  • Maharashtra: ₹3.59 lakh crore
  • Karnataka: ₹1.59 lakh crore
  • Gujarat: ₹1.36 lakh crore

Even resource-scarce states like Jharkhand (₹36,841 crore) and Chhattisgarh (₹37,183 crore) contributed over five times more than J&K.

Lack of Formalisation and Investment Hurting Growth

Economists attribute the shortfall to:

  • Lack of large-scale industries
  • Informal and unorganised sectors
  • Low rural purchasing power

Though the government tried to expand the tax base in hospitality, transport, and healthcare, the impact has been limited.

What Needs to Change

Business groups are calling for:

  • Easier credit access
  • Power subsidies
  • Incentives for digital billing

Without these, GST growth will remain stagnant.

Conclusion: A Call for Structural Reform

The FY 2024–25 data is more than just a revenue snapshot—it’s an economic signal. J&K is not merely underperforming in tax; it’s lagging in overall economic momentum.

For any real progress, the government must focus on:

  • New investments
  • Infrastructure upgrades
  • Formalising trade and services

Only then can Jammu and Kashmir begin closing the gap with the rest of India.

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