Jharkhand which is a hub for many auto component manufacturers has seen a VAT rate cut for the auto component manufacturers. The central excise duty cut on automobiles has been a breather for the beleaguered auto industry. The auto component industry is a major consumer of Flat Steel products. The city of Jamshedpur & Adityapur consist of more than 600 auto spare manufacturing units.
VAT rate for automobile companies in Jharkhand stood at 10%, which was reduced to half in the state budget. VAT rate for neighboring states of Bihar & West Bengal was only 4-5%. The industries close proximity to Bokaro Steel plant and TATA Steel plant gave it a fair advantage against other states for manufacturing auto components at a cheaper rate. A higher tax rate was posing a cost burden on the industry making it vulnerable to tough competition. As per the market participants, many of their customers procured materials from other states due to higher taxes in Jharkhand; VAT rate cut is a welcome move for the entire industry”.
Cold Rolled Steel products used in auto component manufacturing are currently trading at around INR 47,000/MT (Including ED, VAT extra). Indian CRC prices for Week 08, 2014 is as follows:
|
Region |
State |
Basic Price |
Prices (Incl. all) |
W-o-W Change |
M-o-M Change |
|
North India |
Ludhiana |
42,000 |
49,600 |
0 |
0 |
|
|
Faridabad |
42,100 |
49,700 |
0 |
– |
|
West India |
Mumbai |
42,400 |
50,000 |
0 |
0 |
|
|
Ahmedabad |
45,400 |
53,600 |
0 |
500 |
|
South India |
Chennai |
42,300 |
49,900 |
0 |
– |
|
|
Hyderabad |
44,500 |
52,500 |
2,500 |
2,700 |
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