J&K GST Revenue to Decline by Up to ₹1,000 Crore Due to Rate Revision

J&K GST Revenue to Decline by Up to ₹1,000 Crore Due to Rate Revision

Chief Minister Omar Abdullah announced that the recent Goods and Services Tax (GST) rate revision and rationalization implemented by the Central Government are expected to cause a significant reduction in the tax collection of Jammu and Kashmir (J&K), estimating the loss to be up to ₹1,000 crore.

Key Concerns for J&K Revenue

• Anticipated Revenue Loss: The Chief Minister publicly stated that the state exchequer would face a hit of ₹800 crore to ₹1,000 crore annually due to the GST rate cuts.
• Impact of Rate Rationalization: The tax loss is a direct consequence of the government’s decision to simplify the GST structure and reduce rates on a wide range of goods and services, which lowers the tax revenue collected per transaction.
• Fiscal Dependency: The statement highlights J&K’s reliance on tax collections and the pressure placed on the state’s finances by national tax reforms, even when those reforms are intended to benefit consumers through increased affordability.
• Need for Central Support: Such announcements are typically made to draw the attention of the Central Government and the GST Council to the state’s financial difficulties, often leading to requests for compensation or a review of the revenue sharing formula to offset the expected deficit.