The Yogi Adityanath government is all geared up to table the goods and services tax (GST) Bill in the week-long special session of the Uttar Pradesh Assembly beginning on May 15.
This would be the first sitting of the UP legislature in the 2017 calendar and after the Adityanath-led government came to power on March 19. The ruling Bharatiya Janata Party (BJP) has assumed office in the state after a gap of nearly 15 years and it is leaving no stone unturned to ensure the smooth passage of the Bill.
To make things easier for the chief minister, the opposition space in UP is almost non-existent, with major regional outfits of the Samajwadi Party (SP) and the Bahujan Samaj Party (BSP) beset by internal strife and power struggles. Further, Congress continues to be a fringe player in the state's politics.
BJP enjoys the support of 325 members, along with its allies, out of the 403 Assembly seats in the UP legislature. The over 75 per cent majority in UP would come in handy for the party, although the opposition parties are likely to raise issues concerning sugarcane payments, law and order, caste conflicts, among other things, to corner the dispensation.
Meanwhile, the special session was convened to allow the passage of the GST Bill, which has already been cleared by Parliament and now requires ratification by the respective state governments for its pan-India implementation from July 1, 2017.
Earlier, the Adityanath cabinet had on May 2 approved a proposal pertaining to the implementation of GST in UP, after it is tabled and ratified in the state Assembly.
The state government is confident that its tax revenue would increase under GST, which is touted as the most liberal tax structure to be adopted in the country. Besides, any shortfall in revenue under GST would be compensated by the Centre in the early years. However, petroleum products would not be covered under GST.
GST would benefit UP, which had earlier witnessed its tax kitty burgeon under the existing Value Added Tax (VAT) regime too. VAT was implemented in UP on January 1, 2008, during the previous Mayawati-led government. (See table)
Since UP is basically a consumer state with a large basket of goods being imported from other states, the state is projected to be a net tax gainer, since GST is a destination-based taxation system as against manufacturing sourced.
Although, while successive governments in UP have been optimistic of tax coffers inflating under GST, the compensation clause had been a bone of contention.
Over the past several months, the state commercial tax department had been holding consultative meetings with all the stakeholders, including traders and tax experts, to take their opinion on GST. Training programmes for tax officials have also been organised.
| Financial year | 2009-10 | 2010-11 | 2011-12 | 2012-13 | 2013-14 | 2014-15 | 2015-2016 | 2016-17 (Estimated) |
| UP commercial tax revenue | Rs 20,825 | Rs 24,837 | Rs 33,107 | Rs 34,870 | Rs 39,645 | Rs 42,931 | Rs 49,452 | Rs 57,940 |
| Percentage growth | 18 | 19 | 33 | 5 | 14 | 8 | 15 |
17 |