Decline in GST Collections in Jammu and Kashmir: Economic Survey 2025-26
The recently released Economic Survey 2025-26 by the Government of Jammu and Kashmir sheds light on the Rs 508 crore decrease in Goods and Services Tax (GST) collections in the current fiscal year. This decline has been attributed to an economic slowdown caused by various factors, including the completion of major infrastructure projects, subdued commercial activity, and a decrease in tourist arrivals.
According to the survey, GST revenue totaling Rs 5,379 crore was collected up to November in FY 2025-26, reflecting a Rs 508 crore drop compared to the previous year’s Rs 5,887 crore during the same period. The completion of significant rail and road infrastructure projects has notably impacted GST inflows from capital works, contributing significantly to the revenue shortfall.
The survey highlights that GST collections of Rs 8,586 crore in 2024-25 constituted nearly 60% of the Union Territory’s tax revenue and approximately 40% of the total revenue, underscoring the pivotal role of GST in Jammu and Kashmir’s fiscal framework.
To enhance compliance, the government has intensified its monitoring of GST returns. The number of active GST dealers has risen from approximately 65,000 in 2018-19 to nearly 1.5 lakh in 2024-25. Various measures, such as monitoring GST deductions in capital works, conducting risk-based e-way bill verifications, and utilizing advanced data analytics through a business intelligence unit in collaboration with BISAG-N, have been implemented to mitigate revenue leakages and identify fraudulent input tax credit cases.
The survey also attributes the decline in collections to a downturn in commercial activities and a reduction in tourist arrivals following the terrorist incident at Pahalgam, subsequent security measures, and adverse weather conditions, including flash floods during the monsoon.
Despite the economic slowdown, the government remains optimistic about a potential uptick in GST revenues. It anticipates that recent GST reforms and the resumption of bi-annual movement of Secretariat staff between the winter and summer capitals will reinvigorate business activities and bolster revenue collections in the forthcoming months.
