Effects of GST on the Steel Industries in India
Indian steel industries have been one of the biggest contributors to India’s GDP (Gross Domestic Product). These industries have given jobs to over 600,000 people while giving rise to 106.1 MT steel consumption. Being the second-largest steel-producing countries in the world, Indian sectors have grown so much with the help of raw materials like iron ores, and cost-efficient laborers residing here.
Tax Laws on Raw Materials; Iron & Steel
Currently, there are three different laws placed on the manufacturing of Iron and Steel, that have been brought into the highlight.
✓ Excise Duty Taxes at 12.5%
✓ Average VAT at 5%
✓ CST (Central Sales Tax) at 2%
This sums up to a total of 19.5% tax that is solely charged on iron and steel. The items that are made from these two materials are also charged under the same tax rate, excluding Punjab, because the tax rate for VAT there is only 2.5%.
GST Rates on Products Made from Iron & Steel
✦ Items at 12% GST: Utensils, Animal Shoe Nails, Mathematical or Geometrical Boxes, Color Pencils, Household Iron or Steel Products, Stoves, Kerosene Burners, Sewing Needles etc.
✦ Items at 18% GST: Iron and Steel used to make Railway Tracks, Tubes & Pipes, Reservoirs, Tanks, Cans, Bridges, Roofs, Gates, Pillar, Barbed Wires, Containers, Knitting Needles etc.
✦ Items at 28% GST: Radiators for central heating, Ranges, Grates, Barbecues, Gas Rings, Plate Warmers, Braziers, Sanitary Wares and other non-electric appliances etc.
The Impact
Items charged at 12% GST are more likely to become cheaper than the items charged at 28% GST, which is said to do the opposite by increasing in rate. There will be an increase in the GST of sanitary products, and one of the two reasons is because of the ongoing pandemic, while the other being that are present in the 28% tax category. As time goes by, steel industries may start to increase transporting charges, as well the working capital, which is a smart choice, because during long runs it can be very beneficial, as tax rates are expected to be lowered.
ARS Steel
However, even during these phases, some industries are benefiting, and that is not only because of their raw materials, but also the initial product that is manufactured, along with the company’s reputation. Yes, we are talking about the ARS steel that has been in the market since 1990 and has proved to be an essential part of South India especially Chennai, because of their genuine steel rates.
The company first started trading in industrial scraps, and then slowly climbed their way brick by brick, installing furnaces. In time, they set up a rolling mill that had the capacity to produce around 1.80 LAC MT TMT Rebars. Since then, they achieved great heights like installing a 25 Ton Melting Furnace and commissioning a 60 MW Power Plant. They are now become one of the largest sources in manufacturing steel, as well as generating energy, and it is of a great surety that their vision of expanding globally will bring great wonders to the world, and help the people in many ways.
