Archive · 1 Dec 2025
High Court Rules Cross-LoC Trade as Intra-State
The High Court in Jammu & Kashmir and Ladakh has decided that the trade between Jammu & Kashmir and Pakistan-Occupied Kashmir (PoK) from 2017 to 2019 is considered intra-state trade.
This means that the goods exchanged between these regions are treated as if they were within the same state for tax purposes.
The court also said that traders cannot claim that these transactions are exempt from taxes.
The trade, which was a barter system (no money exchanged), was stopped in 2019 due to security concerns.
Now, any tax issues from past trades will have to be resolved through the proper legal process under the GST Act.
The High Court ruled that cross-LoC trade between Jammu & Kashmir and PoK (2017–2019) is intra-state trade.
The court rejected traders' claims that the barter-based trade should be zero-rated or exempt from GST.
The trade was suspended in April 2019 due to security concerns.
Traders argued that the transactions were conducted without currency exchange and should not attract GST.
The court directed traders to resolve tax disputes through the statutory appellate framework under the GST Act.
- Who
- Jammu & Kashmir and Ladakh High Court
- What
- Ruled cross-LoC trade as intra-state trade
- When
- 2017–2019 (trade period), April 2019 (trade suspension)
- Where
- Jammu & Kashmir and Pakistan-Occupied Kashmir
- Why
- To clarify GST treatment and reject zero-rated classification
- Jurisdiction
- Jammu & Kashmir and Ladakh High Court
- Time Period
- 2017–2019
- Trade Nature
- Barter-based
- GST Classification
- Intra-state trade
- Trade Suspension
- April 2019
- Legal Basis
- GST Act of 2017
