Effects of GST Rates

Effects of GST Rates on Iron and Steel Industry in India

The supplies which involve the use of iron and steel material as raw under the Goods and Service Tax(GST). The positive or Negative effects of GST Rates increase or decrease on iron and steel supplies is going to range of industries that involve the use of these materials, including construction and machine parts manufacturing sectors.

Tax Rate on Iron and Steel  Industary– In VAT

In the previous Indirect Taxation System (VAT), the supply of steel and iron was taxable under different tax mechanisms as showing below like

  1. VAT – 5%
  2. Excise Duty – 12.5%
  3. CST (Central sales tax) – 2%

As per the tax rates, the net tax applicable to the sale of iron and steel was around 20% before July 2017. The same rate was applicable to the supply of goods made of these materials in most of the Indian States.

rates on steel and iron Items– After GST

As per the newly implemented taxation system, GST rate on the sale and manufacturing of iron & steel products such as iron bars, rods, and scraps is 18%. However, some other specific articles of iron and steel will be charged at different GST rates, as explained below.

Supplies subject under 18% GST

Here is the list of items under the 18%:-

  • Rates Iron sheets, iron/steel used in the construction of railway tracks
  • Tanks, drums, reservoir, casks and cans, CNG or LPG containers, iron/steel embroidery
  • Building structures, bridges, roofing, iron/steel pillars, lock gates and window frameworks
  • Iron/steel pipes, tubes, barbed wires, etc.

Iron/Steel supplies subject to 12% GST

Here is the list of items under the 12%:-

  • Utensils, sewing & knitting needles, mathematical and geometry boxes
  • Stove and kerosene burners, pencil sharpeners, animal shoe nails, kitchen items
  • Other household articles and similar items made of iron or steel.

Supplies subject to 28% GST

The supply of following iron/steel products is taxable at 28% rate.

  • Iron/steel sanitary ware and any parts, radiators and their parts used in central heating systems
  • Cookers, grates, gas-rings, ranges, barbecues, plate warmers, braziers
  • Other non-electric appliances and parts made of iron or steel.
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