Cross-LoC Barter in J&K Taxable as Intra-State Supply | HC

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  • Last Updated on 3 December, 2025

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cross-LoC barter 

Case Details: New Gee Enn & Sons vs. Union of India - [2025] 181 taxmann.com 1

Judiciary and Counsel Details

  • Sanjeev Kumar & Sanjay Parihar, JJ.
  • S.F. Qadiri, Sr. Adv., Numan Zargar, Ms Snober Sameer & Sikander Hayat Khan, Advs. for the Petitioner.
  • Tahir Majid Shamsi, DSGI, Ms Rehana Qayoom, Adv., Waseem Gul, GA, Mohd Younus Hafiz & Ms Nowhabar Khan, ACs for the Respondent.

Facts of the Case

The petitioners, engaged in cross-LoC barter trade, contended that such transactions were treated as zero-rated under the pre-GST J&K VAT regime and therefore continued to be non-taxable under GST. It was submitted that these barter transactions did not involve currency exchange and were not in the nature of import or export. It was argued that the notices issued were time-barred and invalid as they were composite for multiple years. They also urged that the writ petitions were maintainable and that the jurisdictional officer was not justified in invoking suppression or fraud. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that cross-LoC barter transactions constituted intra-State supplies because both the location of the supplier and the place of supply lay within the territories of the erstwhile State of Jammu &Kashmir, including areas under the de facto control of Pakistan, and were therefore amenable to GST levy under section 8 read with section 7 of the IGST Act. The Court held that the show cause notices were referable to section 74(1) of the CGST Act as their contents indicated prima facie suppression, non-disclosure of outward and inward supplies, non-cooperation during inquiry, and awareness that no exemption notification applied.

List of Cases Referred to

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied