The consumer-centric state of the nation Uttar Pradesh is the main importer comparing to other states and this state will be the net tax gainer. The central government of India has decided to execute the Goods and Services Tax (GST) from the first day of July, 2017. Uttar Pradesh has expected an extension of up to 15% in its tax kitty under the new GST regime.
Increased commercial tax collection
The majority of goods are being imported from peers in this state. The destination based GST regime will play a leading role in the net tax gainer beyond doubt. Tax collections of this state will be increased by 15% under the GST. The commercial tax collection of the state stood at Rs. 57,000 Crore.
There will be an additional mop up over Rs. 8500 Crore due to 15% increase in the overall tax revenue. The commercial tax kitty of the state would burgeon to more than Rs 65,000 Crore. The Government of Yogi Adityanath has to meet these additional expenses over fulfillment o its pre-poll promises.
The GST rate increased on majority of consumer items in particular those used in middle-class and poor households. This issue leads to a trickle-down in the collection of net tax. The total collection will be augmented as enough for the best tax administration and weeding out of tax avoidance under the Goods and Services Tax.
The major overhaul of taxation structure
The taxation structure of the nation has overhauled due to the introduction of changes in the GST since independence. This existing element follows the principle of one tax, one nation. Existing taxes may get subsumed under the new GST. This issue also found a mention in the White House Address of the US President during the most recent visit of Prime Minister Narendra Modi.