Jammu and Kashmir Governor N N Vohra has promulgated an Ordinance introducing amendments to the VAT Act, 2005, making cross Line of Control (LoC) trade tax-free for goods manufactured in the state.

The Ordinance was promulgated by the Governor yesterday on the recommendations of Chief Minister Omar Abdullah as the Assembly is not in session.

An official spokesman said the Ordinance has come in to force with immediate effect.

"The Jammu and Kashmir Value Added Tax (Amendment) Ordinance, 2011, would pave the way for application of zero rate VAT on goods produced and manufactured in the state of Jammu and Kashmir and sold or supplied to the traders across Line of Control via Chakan-da-Bagh in Poonch and Salamabad in Uri tehsil of the state," the spokesman said.

The cross-LoC traders in the state had been for the past several months demanding exemption of VAT on sales made to the traders across Line of Control.

The Governor also promulgated ''the Jammu and Kashmir Fiscal Responsibility and Budget Management (Amendment) Ordinance, 2011'', which would enable the state government to avail several fiscal benefits from the Centre.

The benefits include debt consolidation and relief facility (Rs 115 crore annually), Relief in Interest payment on NSSF loans (Rs 100 crore), waiver of Central Loans (Rs.117 crore) and release of State specific grants (Rs 350 crore), the spokesman said. (PTI)