New Delhi, Oct 11 : The Goods and Services Tax (GST) reforms have brought substantial rate reductions across major industries, having a transformative impact on Jharkhand's economic landscape by lowering costs and improving affordability, the government said on Saturday.

Steel and heavy engineering are the backbone of Jharkhand's industrial development, contributing nearly 20'25 per cent of India's total steel output.

The recent GST reforms further strengthen the state's industrial momentum by benefiting sectors that consume Jharkhand's steel.

The tax on two-wheelers (bikes up to and including 350cc) and small cars has been cut from 28 per cent to 18 per cent, while tractors below 1800cc now attract 5 per cent instead of 12 per cent.

Similarly, tractor parts have seen reductions from 18 or 12 per cent to 5 per cent, and commercial goods vehicles from 28 per cent to 18 per cent.

Additionally, the GST rates for auto components have been brought down from 28 per cent to 18 per cent.

Jharkhand hosts major industrial hubs such as Jamshedpur (Tata Steel) and Bokaro (SAIL-Bokaro Steel Plant), alongside an extensive network of metallurgy-based supply chains spread across Singhbhum and Bokaro districts.

This ecosystem sustains a large formal workforce -- over 1 lakh people (1,04,309 as of 2022'23 as per the Ministry of Statistics and Programme Implementation), and supports a dense vendor and MSME base engaged in fabrication and services.

Notably, these rate cuts lower costs across the auto and machinery value chain by 7.8'11 per cent, making vehicles and equipment affordable and boosting demand.

The resulting uptick in production, logistics, and fabrication spurs higher capacity utilisation in Jharkhand's steel and heavy engineering sector, generating wider employment, increasing MSME orders, and deepening linkages across the state's manufacturing ecosystem.

The primary consumers of Jharkhand's steel and heavy engineering products include the domestic construction, infrastructure, automotive, and capital goods industries.

The state also exports value-added steel products to key international markets, including the US, China, Japan, Nepal, Bangladesh and Europe, thereby reinforcing its position as a crucial player in both domestic and global value chains.

The GST reforms not only stimulate domestic consumption but also enhance the global competitiveness of Jharkhand's industrial and mineral exports.

/IANS