1. ‘GST to boost steel sector, reduce transportation time by 45%’

‘GST to boost steel sector, reduce transportation time by 45%’

The implementation of the goods and services tax (GST), with effect from July 1, will immensely benefit the domestic steel industry as it will improve the sector’s competitiveness and reduce the transportation time by up to 45%, steel minister Birender Singh said here on Thursday.

By: | New Delhi | Updated: June 30, 2017 4:17 AM
gst, goods and services, gst roll out, gst launch, economy, india economy, gst news, gst latest news, july 1, narendra modi, arun jaitley From July 1, GST will replace around a dozen central and state taxes into a single national tax.

The implementation of the goods and services tax (GST), with effect from July 1, will immensely benefit the domestic steel industry as it will improve the sector’s competitiveness and reduce the transportation time by up to 45%, steel minister Birender Singh said here on Thursday. Under the new tax regime, the cost of raw material is set to come down as the GST rate for iron ore, a key steel-making raw material, and other inputs have been kept at 5% from around 11-12% now. This will further add to the competitiveness of the Indian steel sector. “Under the new tax regime, there will be a reduction in the logistics cost as well as on the transportation time. At present, whenever a steel product crosses a state border, there are number of check posts which delay supply of goods to the customer. Under GST, a unified standard rate of tax will reduce cost and delay. It is estimated that close to 40-45 time-saving will happen in transportation time,” Singh said at a workshop on national steel policy and the preferential procurement policy organised by FICCI. “I am confident that GST and two policies will make Indian steel sector more viable and completive and take the steel industry to a new height,” he added. Steel secretary Aruna Sharma said that the GST roll-out will not cause any decline in steel consumption even in the short-term; on the contrary, it will see an upward trend.

“Stockists have cleared the inventory. So now we have to watch how quickly they replenish their stocks. We are expecting minimum time. Our entire effort has been how to reduce their time,” she said. The GST rate for the steel sector has been kept at 18%, which is nearly similar to the present effective tax rate of 18.1% taking into consideration of the prevailing excise duty and VAT rates. Both excise duty and VAT would be subsumed under the GST going forward. Rating agency ICRA does not expect any material impact

Aruna Sharma said that the GST roll-out will not cause any decline in steel consumption even in the short-term

“I am confident that GST and two policies will make Indian steel sector more viable and completive and take the steel industry to a new height,” he added. Steel secretary Aruna Sharma said that the GST roll-out will not cause any decline in steel consumption even in the short-term; on the contrary, it will see an upward trend. “Stockists have cleared the inventory. So now we have to watch how quickly they replenish their stocks. We are expecting minimum time. Our entire effort has been how to reduce their time,” she said. The GST rate for the steel sector has been kept at 18%, which is nearly similar to the present effective tax rate of 18.1% taking into consideration of the prevailing excise duty and VAT rates. Both excise duty and VAT would be subsumed under the GST going forward. Rating agency ICRA does not expect any material impact. Rating agency ICRA does not expect any material impact of the GST rate on end-users of steel products.

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