The number of trucks bringing supplies to J&K daily from other states has fallen by 60 percent since July 1 when Goods and Services Tax (GST) was rolled across India.
Jammu and Kashmir is the only state in India that has not implemented the GST yet because the state has a special status in the Indian Constitution and has the powers to frame its own laws or tailor the pan-Indian laws to its own requirements by amending them.
Opposition parties, traders and separatists have said enforcing the GST in its present form compromises state's residual autonomy and powers to legislate on financial matters.
Because of the stalemate, a trader currently will have to pay a double tax on purchases from other states.
That is why the Lakhanpur toll post, which is the entry point for the vehicles into the state, looks deserted.
"From an average of 2000 trucks that entered J&K daily we receive 800 to 1000 vehicles," said a tax official on the condition of anonymity.
Deputy excise commissioner Lahkanpur toll post Rajesh Sharma said only those trucks arrived in Kashmir that carried non-taxable goods or had been billed under the previous tax system and were in transit.
"Exports have also witnessed a decline," Sharma said.
Central excise division assistant commissioner Jaipal J said a shortage of commodities might arise if the GST Act is not implemented in the state.
The apex business chambers of Kashmir and Jammu regions have a different view point on the current scenario.
President Kashmir Chamber of Commerce and Industries Mushtaq Ahmad Wani asked the government to exempt taxes levied by it till the GST stalemate is resolved.
"It is the responsibility of the government to ensure people don't suffer," he said.
However, president Jammu Chamber of Commerce and Industries Rajesh Gupta said they have asked Jammu traders to stop importing goods till GST is implemented in JK.
"We hope that by July 7 it will be implemented," he said.