10th June 2017
Iron and steel are essential necessities of the construction industry and are usually utilized as a part of the manufacturing of machine parts. We will do an examination of the expense rates charged under the present laws on iron and steel and the rates under GST.
There are three different kinds of taxes that are right now levied on the manufacture of iron and steel (in any form) and reaching the end-consumer.
Central Sales Tax (CST)
A net tax of 19.5 %( 12.5+5+2) are charged on iron and steel under the present laws. Articles made of iron and steel are likewise charged at a similar rate except for Punjab where the VAT rate for articles of iron and steel is 2.5% as of now.
Manufacturing and sale of all kinds of iron and steel like iron rods, bars, and scraps of iron and steel and so forth are charged at the rate of 18%. Different GST rates have been provided for different kind of items made of iron or steel.
1.Mathematical Boxes, Geometry Boxes, Colour Boxes and Pencil Sharpeners
2.Animal Shoe Nail
4. Kerosene Burners or Stoves, Wood burning stoves made of Iron or Steel
5.Table or kitchen or other household Articles of Iron or steel
1. Any kind of sheet
2. All kind of steel used in Railway or Tramway tracks
Tubes and Pipes made of cast iron and other tubes and pipes, including circular cross section the external diameter of which exceeds 406.4mm made of Iron or steel
3. Reservoir Tanks, Casks, Drums, Cans made of Iron or steel
4. Structures used in the building of bridges, lock gates , roofing and window framework, pillars of Iron and steel
5. Containers for compressed or liquefied gas made of Iron or steel
6. Barbed wires used for fencing cable ropes made of iron or steel
7. Sewing, Knitting needles and other stuffs used in embroidery made of iron or steel
1. Range,Cookers, Barbecues , Brazier, Gas-rings, plate warmers and similar non electric domestic appliances and parts thereof ,iron or steel
2. Radiators used in central heating, systems and parts made of iron or steel
3. Sanitary wares and parts made of Iron or steel
Kitchen utensils like stainless steel cooker, container and so forth are probably going to get somewhat less expensive as they are charged at the rate of 12% under GST from the present assessment rate of 19.5%. Grill sets would get costlier under GST as it will be charged at the rate of 28% higher than the present rate of duty. Laying of railroad tracks would be to a great extent unbiased under GST. Sterile things like taps, fixtures and so forth would get costlier under GST as they are likewise kept under the 28% duty section.
The steel business is probably going to appreciate the advantage of lower duty rate of 5% on the significant data sources utilized by them like coal and iron mineral under GST. Transportation administrations utilized for transporting steel is kept under 5% sections which will help in lessening coordination’s cost.
Iron and steel industry would initially have a higher cost due to transition and increase in working capital requirement but in the long run will be beneficial in light of the expected reduction in logistics and lower tax on inputs under GST.
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