GST will Have a Favorable Impact on Steel Industry.
The Indian steel industry is likely to benefit from the new Goods and Service Tax (GST) rate for steel, which has been fixed at 18%. According to Rimjhim Ispat Ltd MD, GST will Have a Favorable Impact on Steel Industry. With major components like coal and iron ore finalized at 5%, which is so far the lowest bar under the new tax reform, industry leaders like JSW Steel, JSPL, Rimjhim Ispat Ltd, Tata Steel BSE, SAILBSE etc., are expecting lower input costs. Moreover, with a significant drop in transportation costs attributable to a standard tax rate, this will help steel companies tormenting under huge debt and also keep steel prices balanced.
GST, India’s biggest tax reform since Independence, was implemented on July 1, unifying numerous central and state levies. After GST rolled out, Yogesh Agarwal, Rimjhim Ispat MD said, “Unorganized players in the industry will have to adopt a more organized plan for doing business.”
Talking about the positives of the GST for steel industry, Rimjhim Ispat MD further said, “The new tax policy eliminated the Special Additional Duty (SAD) on foreign goods which was a very burdensome procedure otherwise.” Another positive aspect will be that GST will bring the trade and industry at par.
He also stated there will be extreme paperwork and increased returns and section 16 (2) (c) which bars input tax credit if seller does not deposit to government reserves. “However in due course, undoubtedly these bottlenecks will be addressed,” Agarwal added.
Another domain body Indian Stainless Steel Development Association (ISSDA) believes that this is an evolutional period for the industry.
Some glitches the steel industry might witness. “For unorganized players, the coming tenure will be a learning year, similar to the post-demonetization phase. I am predicting, whenever a problem will come out, the government will surely take measures to neutral the impact,” explained the MD.
The unsystematic sector will have to get through a learning phase to acclimatize the new tax regime. This will be more technology-driven. The number of IT-enabled stakeholders in the unsystematic sector is not sufficient. They will have to become tech-savvy. People escaping taxes would not be able to endure to any further extent.
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