Applicability of GST on Jammu & Kashmir and UT of Ladakh
Jammu and Kashmir Reorganisation Act, 2019
As per Jammu and Kashmir Reorganisation Act, 2019, the State of Jammu & Kashmir has been divided between Union Territories, namely, Union Territory (UT) of Jammu and Kashmir and UT of Ladakh.
As per the Act, Jammu and Kashmir as well as Ladakh are now Union Territories. Jammu and Kashmir will have a legislative assembly.The Union Territory of Ladakh includes Leh and Kargil.
Union Territories are governed directly by the Union of India.
Union territory as per GST Act
As per Section 2(114) of the CGST Act Union Territory means
(a) The Andaman and Nicobar Islands
(b) Lakshadweep
(c) Dadra and Nagar Haveli and Daman and Diu
(d) Daman and Diu
(e) Ladakh (Brought into force w.e.f 30.06.2020 by The Finance Act, 2020)
(e) Chandigarh
(f) Other territory
Chandigarh, Daman and Diu, and Dadar and Nagar Haveli are UTs with no elected assemblies are governed directly by the Center Govt.
So therefore now Ladakh is also covered in the definition of Union Territory. So UTGST will be applicable in state of Ladakh.
Applicability of GST in Jammu & Kashmir and Ladakh
As per Section 7(1)(b) of the IGST Act:- Union Territory of Jammu and Kashmir shall continue to charge SGST and CGST for intrastate supplies within state of Jammu and Kashmir, however for supplies made from Jammu & Kashmir to Ladakh and from Ladakh to Jammu & Kashmir, IGST shall be charged.
UTGST and CGST will be charged for intrastate supplies within the state of Ladakh.
The Ministry of Home Affairs (Department of Jammu and Kashmir Affairs) has issued a Removal of Difficulties Order dated 30-10-2019 which seeks to remove difficulties arising in giving effect to the provisions of the Jammu and Kashmir Reorganisation Act, 2019.
Section 2(7) of the said order states that:-
(1) "The Jammu and Kashmir Goods and Services Tax Act, 2017 shall be applicable to the Union Territory of Jammu and Kashmir."
(2) "The Union Territory Goods and Services Tax Act, 2017 shall be applicable to the Union Territory of Ladakh."
So the J&K GST Act, 2017 will applicable to Jammu and Kashmir and CGST and SGST will charge on all transactions within state of J&K . However UTGST Act 2017 will be applicable on Union Territory of Ladakh and UTGST and CGST will charge on all transactions within the state of Ladakh.
Summary of applicable Act and GST tax
| Supply of Goods and Services | Nature of Supply | GST Applicable | Act Applicable |
| Supplies made from any state other than Union Territory to Jammu & Kashmir. | Inter-state Supply | IGST | IGST Act 2017 |
| Supplies made within the state of Jammu & Kashmir. | Intra-state Supply | SGST & CGST | J&K GST Act 2017 |
| Supplies made within the state of Ladakh. | Intra-state Supply | UTGST & CGST | UTGST Act 2017 |
| Supplies made from the UT of Jammu & Kashmir to UT of Ladakh. | Inter-state Supply | IGST | IGST Act 2017 |
| Supplies made from Ladakh to Jammu & Kashmir. | Inter-state Supply | IGST | IGST Act 2017 |
| Supplies made from Jammu & Kashmir to any state other than Union Territory. | Inter-state Supply | IGST | IGST Act 2017 |