J&K’s monthly revenue touches Rs 1,180 Cr as tax reforms bear fruit

Srinagar, Apr 13: The Union Territory of Jammu and Kashmir has achieved unprecedented levels of tax collection, with average monthly revenue reaching Rs 1,180.45 crores in fiscal year 2024-25.

The monthly tax collection figures reveal a consistent upward trajectory, rising from Rs 975.61 crores in FY22 to Rs 1,027.96 crores in FY23, followed by Rs 1,158.60 crores in FY24, before reaching the current high of Rs 1,180.45 crores.

“This sustained growth in monthly tax revenue demonstrates the effectiveness of our systematic reforms in tax collection mechanisms,” said a senior finance department official who requested anonymity. “We’ve moved from sporadic collection patterns to a more stable and predictable revenue stream.”

The Goods and Services Tax (GST) has emerged as the backbone of J&K’s tax revenue, contributing approximately Rs 725 crores monthly, which accounts for 61% of the total tax collections. The dramatic expansion in GST registrations has been particularly noteworthy, with dealer registrations nearly doubling from 1,15,894 in 2019-20 to 2,16,033 by January 2025.

Active GST registrations have shown an even more impressive growth trajectory, increasing from approximately 72,000 in 2019-20 to over 151,000 by January 2025, reflecting broader tax compliance across the business community.

To combat GST leakages, the administration has implemented sophisticated tracking mechanisms for GST deduction under capital works, risk-based e-way bill verifications, and scrutiny of red-flag cases based on inputs from Business Intelligence Unit (BIU) and GSTN.

While GST dominates the revenue landscape, other significant monthly contributors include excise (approximately Rs 169 crores monthly, accounting for 14% of tax revenue), sales tax (about Rs 146 crores monthly at 12%), vehicle taxes (Rs 77 crores monthly at 6.5%), and stamps and registration fees (Rs 58 crores monthly at 4.9%).

The excise sector has witnessed remarkable growth following the administration’s introduction of the e-Abgari platform for tracking the supply chain, notification of a new excise policy, and conducting transparent auctions for liquor vend allotments. These reforms contributed to a substantial 39% growth in excise revenue in FY24.

The monthly non-tax revenue collection has demonstrated even stronger growth, reaching Rs 568.19 crores in FY25, representing a 41% increase from FY22’s monthly average of Rs 403.37 crores.

The power sector has emerged as the dominant contributor to non-tax revenue, accounting for approximately Rs 378 crores monthly (67% of non-tax revenue). The installation of over 6.84 lakh smart meters has revolutionized power revenue collection, reducing transmission and distribution losses while improving billing efficiency.

“The smart metering initiative has been a game-changer for our revenue collections,” noted the official. “With plans for 100% coverage of power consumers within the next three years, we anticipate further growth and stabilization in our power sector revenues.”

Major and medium irrigation projects contribute about Rs 98 crores monthly (17% of non-tax revenue), while various smaller sources make up the remaining 16%.

The comprehensive tax revenue figures underscore the administration’s success in revenue augmentation, with total collections rising from Rs 11,707.28 crores in FY22 to Rs 12,335.47 crores in FY23, and further to Rs 13,903.22 crores in FY24, marking a 13% growth. The current fiscal year has already seen collections of Rs 10,624.09 crores by December, representing 76% of the previous year’s total.

Similarly, non-tax revenues have shown remarkable improvement, increasing from Rs 4,840.45 crores in FY22 to Rs 5,147.55 crores in FY23, and reaching Rs 6,430.33 crores in FY24, a 25% growth. By December of FY25, non-tax revenues had already touched Rs 5,113.71 crores.

Six major contributors—GST, power tariff, excise, sales tax, water user charges, and vehicle taxes—have increased their collective share from 86% in FY22 to 93% in FY25. The growth rates across these contributors over this period are striking, with vehicle taxes showing a 96% increase, power tariff collections increasing by 67%, GST collections up by 36%, water user charges rising by 33%, and excise collections growing by 14%. Sales tax, however, has bucked the trend with an 8% decrease.

With GST collections projected to reach Rs 8,700 crores in FY25 and excise revenue expected to touch Rs 2,000 crores, the administration anticipates maintaining the current growth trajectory. The non-tax revenues are expected to reach Rs 7,200 crores in 2024-25, with potential for an additional Rs 800 crores through sustained revenue enhancement measures.