UP to benefit most from GST reforms: CM Adityanath hails PM Modi for 'Diwali gift'

Lucknow, Sep 18 (PTI) Uttar Pradesh will be the biggest beneficiary of the recently announced GST reforms, Chief Minister Yogi Adityanath said on Thursday, citing the state's large consumer base, rapid infrastructure growth and thriving manufacturing hubs.

He said the tax changes will give a major boost to farmers, local industries and employment while strengthening the state's transformation from a 'BIMARU' state to a prosperous one.

Adityanath thanked Prime Minister Narendra Modi and Union Finance Minister Nirmala Sitharaman for the "transformative" reforms. He lauded PM Modi for the "Diwali gift".

Addressing a press conference here, CM Adityanath said that being the most populous state, Uttar Pradesh is also the country's largest consumer market.

"UP's infrastructure has grown tremendously - six cities now have metro rail services, 16 airports are functional and by the year-end, the country's biggest airport will also be operational," he said.

The CM said the state, "being India's largest consumer market, stands to gain the most from GST reforms." He explained that revenue from VAT and sales tax was only Rs 49,000 crore before 2017, but has now increased to Rs 1.15 lakh crore (excluding the state's central share).

These reforms, he said, have enabled the expansion of expressways, metro rail, and airport networks in the state. Uttar Pradesh's peppermint, footwear, ready-made garments, and One District One Product (ODOP) industries will particularly benefit, he said. While synthetic menthol has been taxed at 18 per cent, organic menthol -- ”produced largely in UP -- ”will be taxed at only five per cent, providing a major boost to both farmers and industries.

He highlighted that Uttar Pradesh has three crore farmer families, which will hugely benefit as agricultural equipment and other inputs will now be cheaper under the new GST regime.

"This will allow farmers to procure more at lower prices," the CM said.

The chief minister also underlined the benefit for Uttar Pradesh's footwear and garment industry, with GST on footwear up to Rs 2,500 now fixed at five per cent and a reduction in GST on ready-made garments.

"Agra and Kanpur are major hubs of footwear manufacturing. This will not just help the industry but also boost employment," he said.

Adityanath said the One District One Product (ODOP) initiative would also get a fillip with the GST cuts, further spurring local manufacturing and job creation.

He further pointed out that in the last eight years, Uttar Pradesh has complied with the FRBM limit while emerging from a 'BIMARU' state to one of the country's fastest-growing economies.

"The GST Council has announced tax rebates and reforms, which will come into effect from September 22. This is PM Modi's Diwali gift to the people," Adityanath said.

He said that before GST was rolled out in July 2017, all honest taxpayers were adversely affected as tax rates and cess were very high, and there was no integrated system of taxation.

"GST integrated these taxes under the principle of 'one nation, one tax', which led to a significant rise in GST registrations and direct benefits for the economy," he said.

CM Adityanath said the new reforms have simplified the structure with only two main tax slabs -- five per cent and 18 per cent -- which will benefit the common man, farmers and the masses across all sectors.

"These reforms are expected to give a growth push of Rs two lakh crore to the economy," he said, adding that items of daily household use will now have zero per cent GST.

"For farmers, the GST on agricultural equipment has been slashed to five per cent, which will help reduce costs and boost the farm economy," he said.

The chief minister also said health insurance will become significantly cheaper, while students will benefit as stationery and notebooks are now going to be cheaper.

"Yes, luxury items will become costlier, but these reforms will empower the poor and middle-class families," CM Adityanath added.

The CM said GST reforms will provide relief from inflation, strengthen trade, and simplify the lives of citizens, and will directly benefit consumers, farmers, businesses, and ordinary families.

He noted that the tax reforms announced by the prime minister on Independence Day have shown results within just 20 days, with the decisions taken at the 56th GST Council meeting on September 3 now coming into effect.

According to him, this is "not merely a tax change" but part of a "broader campaign" to boost India's economy.

The CM highlighted that before the rollout of GST in July 2017, a web of complex taxes -- ”VAT, sales tax, service tax, excise duty, entry tax, and entertainment tax -- ”burdened consumers and businesses alike.

The chief minister underlined the government's commitment to improving the ease of doing business.

Tax registrations have been made auto-approvable, refunds are being processed faster, and risk-based compliance and labour reforms have been implemented.

He noted that before GST, India's tax collection stood at just Rs 7 lakh crore, but now it has surged to Rs 22.8 lakh crore, while the number of taxpayers has risen from 65 lakh to 1.5 crore. PTI MAN KIS MNK MNK MNK