J&K–Ladakh High Court Rules Cross-LoC Trade With PoK Is Intra-State, Making It Liable To GST Under Indian Law

J&K–Ladakh High Court Ruling on Cross-LoC Trade

New Delhi: The Jammu & Kashmir and Ladakh High Court has ruled that trade conducted across the Line of Control (LoC) with Pakistan-occupied Kashmir (PoK) constitutes intra-state trade under Indian law. Consequently, such trade falls under the jurisdiction of the Goods and Services Tax (GST) framework.

Court’s Interpretation

The bench clarified that while the LoC separates the regions, trade conducted through designated routes approved by the Indian government does not qualify as international trade. Instead, it must be treated as trade within the boundaries of the Union of India.

Background

The Cross-LoC trade initiative, started in 2008 as part of a confidence-building measure between India and Pakistan, allowed for the exchange of local goods through specific trade routes connecting the two sides of Jammu and Kashmir.

However, differences emerged regarding taxation and regulatory oversight. The recent ruling resolves this ambiguity by placing such transactions squarely under India’s domestic tax regime.

“Trade through LoC is not international trade but intra-state commerce within the Union of India,” the court observed.

Implications

The decision is expected to strengthen India’s administrative and taxation control over economic activities in the Jammu & Kashmir region. It also sets a precedent for how trade activities with territories under illegal occupation by Pakistan are to be legally and economically categorized.

Author’s Summary

The High Court affirmed that trade with PoK across the LoC is internal to India and subject to GST, reinforcing the Union’s fiscal jurisdiction in Jammu and Kashmir.

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Free Press Journal on MSN Free Press Journal on MSN — 2025-11-30

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