Jammu and Kashmir’s Goods and Services Tax (GST) collection for May 2025 recorded a steep fall, slipping to 422 crore—a drop of over `360 crore compared to April’s 789 crore.
While the month-on-month decline is significant, officials see a positive sign in the broader trend: May’s collections are still 24 per cent higher than the same month last year, highlighting sustained annual growth in the region’s tax base.
Officials attribute the sudden drop comes in the wake of the Pahalgam terror attack in late April, which dealt a heavy blow to Kashmir’s tourism-reliant economy. The attack triggered widespread cancellations, empty hotel rooms, and a sharp dip in visitor arrivals, particularly during what is typically a bustling spring tourism season.
“The attack led to widespread disruptions in business activity. From hotels and taxis to small shops and artisan outlets, everyone felt the impact,” said a senior official from the J&K finance department, speaking on the condition of anonymity. “This slump has clearly shown up in our GST figures.”
Tourism in Kashmir isn’t just a seasonal affair—it’s a lifeline for thousands of small and medium enterprises that cater to travellers. From local handicrafts to dried fruit sellers, a large portion of Kashmir’s trade is linked directly or indirectly to tourism. The attack, therefore, sent ripples across the economic landscape.
Despite the dip in May, the long-term picture remains encouraging. In the financial year 2023–24, J&K recorded a GST collection of 6,704 crore—a substantial rise from 2,320 crore in 2017–18. GST now accounts for approximately 61 per cent of the Union Territory’s total tax revenue, underscoring its growing importance to the regional economy.
Officials attribute this steady rise to improved compliance, digitisation of tax processes, and better monitoring of trade flows. “There’s greater awareness among traders now, and many have come into the formal economy. The system is becoming more robust,” said another official involved in GST monitoring.
However, the May figures are a reminder of the fragility that still persists. Any disruption—especially one tied to security—can lead to cascading economic consequences.
With the annual Amarnath Yatra set to begin soon, there is cautious optimism that tourist activity will rebound, potentially lifting June’s GST figures. But May’s numbers underscore the need for deeper economic resilience and diversification beyond tourism.
Source from: https://www.greaterkashmir.com/business/jk-gst-collection-slumps-to-422-cr-in-may-after-april-peak-of-789-cr/
