LUCKNOW: Lauding the Central government's latest GST tax cuts and reduced rates set to come into effect from Monday, Uttar Pradesh Chief Minister Yogi Adityanath on Thursday described the GST reforms as Prime Minister Narendra Modi’s Diwali gift to the people of India.
Addressing a press conference, the Chief Minister expressed his gratitude to the Prime Minister and Union Finance Minister Nirmala Sitharaman, stating that the move would prove to be a historic step towards generating employment and benefiting farmers, businessmen, and all other sections of society.
“Before GST was introduced in 2017, traders and ordinary citizens faced multiple tax-related challenges. The Central government implemented GST under the ‘One Nation, One Tax’ system, replacing four layers of taxation with just two. Luxury items will now attract a 40 percent tax,” the Chief Minister said.
Highlighting that Uttar Pradesh has the largest consumer market and the biggest farming community in the country, CM Yogi said the state would be the biggest beneficiary of GST reforms.
“The tax reforms announced by the Prime Minister as a Deepawali gift will greatly benefit Uttar Pradesh, which has the largest population. GST is a consumer tax, and UP is home to the country’s largest consumer market,” he said.
“Until 2017, UP had a combined collection of sales tax, VAT, and cess of about Rs 49,000 crore.”
The CM noted that the government had reduced or removed taxes on agricultural equipment, bringing the GST rate down to 5 percent, directly benefiting farmers. Taxes were also slashed on two-wheelers, notebooks, and stationery.
GST on footwear priced up to Rs 2,500 has been reduced to 5 percent, offering relief to Agra’s footwear industry. Likewise, ready-made garments under Rs 2,500 will now attract just 5 percent GST, a move expected to boost the state’s textile sector.
“Because of the reduced tax on readymade garments below Rs 2,500, Uttar Pradesh can emerge as a major hub for garment production,” Yogi added.
These measures, he said, are expected to raise the nation’s GDP by Rs 2 lakh crore, with a proportionate increase in Uttar Pradesh’s share.
Despite the reforms, UP collected Rs 1.15 lakh crore in GST last year alone, he said. Excise collections also rose significantly—from Rs 12,000 crore earlier to Rs 55,000 crore today.
Sharing further details, the CM said farmers engaged in menthol and peppermint production had previously faced challenges due to competition with synthetic alternatives.
“Under the new tax structure, organic menthol will attract only 5 percent GST, while synthetic menthol will be taxed at 18 percent. This will boost demand for organic products and assist in their export, benefitting local farmers,” he said.
For ordinary families, he noted, the zero or 5 percent GST on essential household items such as milk, curd, paneer, and other products like shampoo, toothpaste, soap, and bicycles would not only reduce household expenses but also increase spending capacity.
Before GST, India had 17 different types of taxes, he said. Today, only GST and VAT on petrol remain. GST, he emphasized, represents a new federal tax model. He pointed out that tax collections have grown from Rs 4 lakh crore before 2014 to over Rs 25 lakh crore today, funding critical infrastructure projects such as national highways.