(Correction) India: Chhattisgarh High Court orders Uniform VAT Tax

The High Court double bench in Chhattisgarh has ordered uniform VAT to be applicable on all state based Steel Industry challenging the CG Budget FY15. Sources close to the matter said no petition has been filed for different CST till yet. But, it is expected that if the court’s judgment will be in favor of uniform tax regime, this will be also applicable for CST.

A manufacturer based in the state said, “The case was filed by the primary petitioner, Pasa Associates (TISCON authorized distributor in the state) along with Co-petitioner against the CG government budget (Notification) on the ground of different tax structure on the same product.”

He also added, the decision has a retrospective effect from April, 2014 but detail impact on tax collection and its refund will be clarified by the CG government.

The copy of the judgment has not been received yet. Therefore, it is still unclear that what VAT taxes will be applicable to Chhattisgarh based steel units i.e. whether 4% or 3% VAT. At present, 4% VAT is applicable to large scale industry (capital above 10 crore) on products like Rebar, Structure, Pipes, and Wire Rod.

Industry sources believe that a uniform VAT of 3% will be applicable on all sizes of steel industry.

All primary Steel producers such as SAIL, Tata, RINL, JSPL and Monnet may be benefited by the order. Other Chhattisgarh based secondary Rebar producers such as Shri Bajrang Power & Ispat, Real Ispat & Power including other may also get benefit. Kamdhenu Ispat and GR sponge are excluded from this list.

Rebar Companies that may get Benefit