GST collections dip Rs 508 cr in FY26 amid slowdown: J&K Economic Survey

Srinagar, Feb 05: The Economic Survey 2025-26 presented by the Government of Jammu and Kashmir has attributed a Rs 508 crore decline in Goods and Services Tax (GST) collections in the current financial year to an economic slowdown caused by multiple factors, including the completion of major infrastructure projects, subdued commercial activity and a drop in tourist arrivals.

According to the survey, GST revenue of Rs 5,379 crore was realised up to November in FY 2025-26, which is Rs 508 crore lower than the Rs 5,887 crore collected during the corresponding period of the previous year. The completion of major rail and road infrastructure projects reduced GST inflows from capital works, contributing significantly to the shortfall.

The survey notes that GST collections of Rs 8,586 crore in 2024-25 accounted for nearly 60 per cent of the Union Territory’s tax revenue and around 40 per cent of total revenue, highlighting the central role of GST in J&K’s fiscal structure.

To strengthen compliance, the government said it has stepped up monitoring of GST returns. The number of active GST dealers increased from around 65,000 in 2018-19 to nearly 1.5 lakh in 2024-25. Measures such as tracking GST deductions under capital works, risk-based e-way bill verifications, and enhanced data analytics through a business intelligence unit and partnership with BISAG–N have been undertaken to curb revenue leakages and detect fake input tax credit cases.

The survey further attributed the dip in collections to a slump in commercial activity and a decline in tourist arrivals following the terror attack at Pahalgam, subsequent security operations and adverse weather conditions, including flash floods during the monsoon.

Despite the slowdown, the government expressed optimism about a revival in GST revenues, stating that recent GST reforms and the resumption of the bi-annual movement of Secretariat staff between the winter and summer capitals are expected to revive business activity and improve revenue collections in the coming months.