Bhat Yasir
The Jammu Kashmir Legislative Assembly has introduced the Jammu Kashmir Goods and Services Tax (Amendment) Bill, 2025, bringing significant changes to the taxation system in the region.
The bill, which amends the J&K GST Act, 2017, aligns the region’s tax laws with national GST reforms while expanding the taxation scope to include digital services like online gaming and virtual digital assets.
One of the most notable changes, as per a copy of the bill accessed by The Kashmiriyat, is the inclusion of online gaming, betting, casinos, and virtual digital assets (VDAs) in the tax net. The amendment defines online money gaming as any digital game where players deposit money or virtual assets with the expectation of winning monetary rewards.
Additionally, virtual digital assets—including cryptocurrencies and tokens—have been recognized within the GST framework. Transactions involving these assets will now be subject to taxation.
The bill introduces tighter restrictions on availing Input Tax Credit (ITC), making it mandatory for suppliers to furnish proper invoices before businesses can claim tax credits. The government has also imposed a three-year limit on filing ITC claims,.
Another major shift is the inclusion of extra neutral alcohol (ENA) and rectified spirit—essential ingredients for alcoholic beverages—under the taxable goods category. While liquor for human consumption remains outside the GST framework, taxation on its key ingredient is expected to increase revenue collection from the alcohol industry.
The amendment introduces steeper penalties for electronic commerce operators (ECOs) that allow transactions by unregistered suppliers or facilitate unauthorized inter-state supplies. Digital platforms now bear a greater responsibility for ensuring compliance with tax laws. A new section (74A) has been introduced to streamline tax determination for the financial year 2024-25 onwards. This section lays down stricter timelines for tax assessments, preventing businesses from delaying payments indefinitely.
Under the new bill, Jammu and Kashmir will no longer have a separate GST appellate tribunal. Instead, disputes and appeals will be handled by the Goods and Services Tax Appellate Tribunal (GSTAT) under central jurisdiction. This move aims to create a unified tax dispute resolution system, expediting cases and reducing bureaucratic hurdles.
The bill also brings several procedural relaxations, such as extending the time limit for refund claims from six months to two years and permitting businesses to avail ITC for invoices issued as far back as 2017. Additionally, taxpayers will have up to three years to file returns and corrections, reducing last-minute disputes.
With the new amendments, businesses in J&K—particularly those operating in the digital and alcohol sectors—will face increased taxation and compliance requirements. The inclusion of online gaming and virtual assets signals the government’s intent to regulate these emerging industries, ensuring they contribute to the tax ecosystem.
At the same time, stricter compliance measures mean businesses must ensure timely and accurate tax filings to avoid penalties. The shift to a national appellate tribunal will likely speed up dispute resolution but may also centralize legal authority, leaving local businesses with fewer regional options for appeal.
By expanding the tax net to cover digital economies, online gaming, and alcohol-related products, the government aims to increase revenue collection while closing loopholes in tax compliance.
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