Indian Stainless Steel Development Association (ISSDA), India’s apex stainless steel industry body, has shown confidence in the forthcoming GST regime and claimed that it will be a game changer for the stainless steel industry. GST rates for the Primary stainless steel products have been set at 18% while the current rates on these products amount to 19.5% with 12.5% excise duty, 5% of VAT and 2% CST. This will help the industry in reducing tax compliance.
Another positive side of GST on the stainless steel industry could be the inclusion of raw materials like coal and iron ore in tax slab of 5%. Logistics which forms crucial part of cost structure for any product is also expected to reduce significantly with seamless movement of goods across the states. However, industry would stand to gain more if electricity, furnace oil and natural gas could also be considered under the ambit of GST. Stainless steel is majorly produced through the electric arc furnace or induction furnace route, where electricity is a major cost of production. Similarly, furnace oil and natural gas are used for re-heating steel. All these components may affect the competitiveness of the industry in the long run.
