Impact of GST Rate on Steel and Iron in India
Current Tax Laws on Iron and Steel
The steel industry utilizes raw materials like ferronickel and coking coal. The union government of India has waived off custom duty on importing both these raw materials. This move by the government will help reduce the cost of domestic production and bring down the prices. In addition to this, the government has increased the duty on exports of iron ore was increased by up to 50% to increase its availability at home. The tax on the export of iron ores as well as concentrates has been hiked from 30% to 50%. A duty of 45% has been levied on iron pellets. These tax cuts will lower the cost of the final products and benefit domestic industries immensely.
GST Rates on Steel and Iron
Iron and steel products are levied with a GST rate of 18%. This is the national economy includes wires, rods, blocks as well as rolls. The other inputs utilized by the steel industry, e.g., coal, transport services as well as iron, are entitled to a GST of 5% only. This will reduce the cost of steel considerably and favour numerous industries where steel forms a major constituent of their products. Given below are the various GST rates applicable to iron and steel products.
GST Rates on Steel and Iron
List of Inputs Which must Pay an 18% GST • Pig iron. • Ferroalloys. • Ferrous products. • Ferrous waste and scrap. • Granules & powders. • Iron & non-alloy steel. • Semi-finished goods of iron and non-alloy steel. • Flat-rolled goods of iron or nonalloy steel. • Rods & bars – non-alloy steel & also in irregular wound coils. • Wires of stainless steel. • Angles, shapes as well as sections of stainless steel. • Wires of alloy steel.
List of Products Which must Pay an 18% GST
• All containers are made of iron and steel, which are utilised in compressed gas. • Washroom fittings of sanitary ware, made of steel or iron. • All water tanks, drums, reservoirs, as well as cans are made of iron or steel. • Infrastructure – window frameworks, lock gates, pillars, and bridges. • Knitting needles made of steel or iron. • Railway and tram tracks.
The List of Goods Levied with a 12% GST Is as Follows.
• Utensils like pans, ladles, spoons, and stainless-steel cookers. • Kerosene and stove burners. • Sewing needles. • School stationery like geometry boxes, colour pencil boxes, and pencil sharpeners. • Home items made of iron and steel, e.g., tables and kitchen interiors. • Animal shoe nails. • All kitchen utensils, e.g., are levied with a 12% GST, which was 17.5% VAT regulations earlier.
The List of Goods Levied with a 28% GST Is as Follows:
• These include goods which have components of iron and steel. • Radiators used in central heating systems. • Gas range and gas rings. • Barbecues. • Portable heaters like braziers. • Plate warmers. • Other non-electric domestic appliances have iron and steel components.
Consequences of Not Following E-invoicing Provisions
The consequences of E-invoicing are logical in the context of the GST system. However, be aware that it is linked to various other aspects of the GST channel and serves as proof of a transaction. If the provisions for E-invoicing are not adhered to, you may face penalties from other areas of the system.
1.No E-invoice, Means No Invoice
Informal/Formal: Following Rule 48(4) of the CGST Act, 2017, specified classes of registered persons are required to issue an e-invoice. Failure to do so renders the invoice null and void. Moreover, the lack of issuance of an invoice shall be viewed as a bogus transaction and may be penalized according to the provisions of Section 122 of the CGST Act, 2017.
2.Invoice Stands Invalid
Complying with Section 31 of the CGST Act of 2017, all goods, services, or both must be accompanied by an invoice or bill of supply. To ensure the validity of the invoice and steer clear of any penalty, we recommend you generate an Invoice Reference Number (IRN) and include the QR code that is provided. Failing to register your invoice on the Integrated Registration Portal (IRP) renders it invalid.
3.Restriction to Utilize ITC
Without a valid tax invoice containing an IRN, the buyer has the potential to be adversely affected when it comes to claim an Input Tax Credit. Section 16 of the CGST Act, 2017 clearly states that if you don't have a valid tax invoice or debit note, you are not allowed to claim ITC. Therefore, it is essential to issue a tax invoice for every supply of goods or services to keep the buyer from having to refuse delivery or payment.
4.Probable Transit Hindrance
Transporting goods without a valid e-invoice that includes an IRN and QR code is a violation of Section 129 of the CGST Act 2017, and may result in the detention of goods, vehicles, and a standard e-way bill penalty. To avoid this, make sure to issue a valid e-invoice before sending your goods.
5.E-invoice Affects E-waybill Compliance
It is critical to use extreme care when conducting transit transactions through e-invoicing and billing. An E-Way Bill should not be generated for an invalid document, which could result in an unauthorized movement of goods. As such, an invoice is not valid without an iRN (if applicable). Current government systems are not set up to detect such irregular transactions, so caution must be taken.
Source: https://taxmill1995.blogspot.com/2022/12/impact-of-gst-rate-on-steel-and-iron-in.html
