Cross-LoC Trade Classified as Intra-State Under GST Act, Rules J&K High Court

The Jammu and Kashmir and Ladakh High Court has ruled that cross-Line of Control trade between the Union territory and Pakistan-Occupied Kashmir is considered intra-state trade under the GST Act. This decision follows petitions by traders challenging GST show-cause notices on transactions made during 2017-2019. The court dismissed these petitions, advising traders to seek statutory remedies.

The Jammu and Kashmir and Ladakh High Court has clarified the classification of cross-Line of Control trade as intra-state under the GST Act. The ruling was part of a case involving traders who petitioned against show-cause notices issued regarding barter transactions from 2017 to 2019.

Petitioners argued that the trade was barter, thus exempt from sales tax. However, the court, led by Justice Sanjeev Kumar and Justice Sanjay Parihar, asserted that the transactions were intra-state since PoK is part of J&K territory.

Dismissing the traders' petitions, the court recommended utilizing the statutory remedies available under the CGST Act of 2017. The ruling underscores the regulatory framework governing cross-LoC trade activities.

(With inputs from agencies.)