Sanjay K Agrawal, President of Steel & Hardware Chamber of Vidarbha welcoming the landmark decisions announced by the GST Council regarding rationalization of GST rates said, these will have a direct impact on the iron & steel trade and allied industries.
The increase in GST on GTA (Goods Transport Agency) services from 12% to 18% is a matter of concern for the trade, as logistics form a significant component of the cost in steel and hardware business. While input credit will be available, the higher working capital requirement may put additional pressure on small and medium enterprises.
At the same time, the reduction of GST on cement from 28% to 18% is a long-awaited and highly positive step. This will lower project costs in the construction and infrastructure sector, which in turn will stimulate demand for steel and hardware products in the region and across the country.
Mukul Agrawal, Secretary, SHCV said rationalization of GST rates on motor cars—bringing down the rate on vehicles up to 4000 mm length from 28% to 18% is expected to boost automobile demand, thereby creating indirect demand for steel. On the other hand, the increase in GST on larger cars from 28% to 40% will impact the luxury segment, but overall, the automobile sector stands to gain from improved affordability of mass-segment vehicles.
While higher transport GST may create cost-side challenges, the overall direction of reforms is progressive, with strong potential to boost infrastructure, housing, and automobile-led growth, all of which are key demand drivers for the steel and hardware sector.
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