Jammu and Kashmir Chief Minister Omar Abdullah on Wednesday warned that the proposed Goods and Services Tax reforms could slash the Union Territory’s revenue by 10–12 per cent, aggravating its already fragile fiscal position as public revenues have ‘collapsed’ in the aftermath of the Pahalgam terror attack.
In his written speech circulated at the 56th GST Council meeting, Abdullah stressed the need to create safeguards to protect the fiscal stability of states and union territories. “The major sectors of the economy, like tourism, transport, construction, automobiles have come to a standstill post April 2025. The proposed reform can further reduce our GST revenues by 10–12 per cent. Hence as the Finance Minister of Jammu and Kashmir, I am of the opinion that establishing suitable mechanisms and safeguards for the fiscal stability of States and UTs is critical,” he stated.
The Goods and Services Tax (GST) Council on Wednesday approved a simplified two-slab structure of 5 and 18 per cent, which will take effect from 22 September. Bihar Deputy Chief Minister Samrat Choudhary said the decision was reached with consensus among all states.
The 56th meeting of the GST Council, chaired by Union Finance Minister Nirmala Sitharaman, began on Wednesday and is scheduled to conclude on Thursday. The move to rationalise slabs has been among the most anticipated reforms under the indirect tax regime.
The reform package, aligned with Prime Minister Narendra Modi’s Independence Day assurance of ‘next-gen GST reforms before Diwali,’ is anchored on three principles: structural reforms, rationalised rates and ease of living.
