India: Chhattisgarh Government cuts CST on Ferro Alloys to 1%

Presenting the state’s budget for FY16, Dr Raman Singh, Chief Minister of Chhattisgarh, has given some relief to Steel & Ferro alloy industry. The government has reduced CST on all Ferro alloys to 1% from 2% and reduced VAT on re-rolled products to 4% from 5% wef 1 Apr’15.

“Central State Tax (CST) is reduced to 1% (existing 2%) on sale of Ferro alloy to outside the state of Chhattisgarh. Ferro alloy industry welcomes this move as most of the material is being sold to steel mills located outside the state on stock transfer basis.

With CST being cut to 1%, we will prefer to bill it on CST rather than consignment sale. We can also save on our warehouse and handling expenses, “ said a Ferro alloy manufacturer based in Raipur, Chhattisgarh.

Ferro Alloy Capacity in Chhattisgarh

There are about 30-31 Ferro alloy units in Chhattisgarh, which produce Ferro Manganese and Silico Manganese. The state contributes about 20% of total Ferro alloy capacity in the country. Moreover, most of the Ferro alloys is being sold to states like Maharastra, Gujarat, Rajasthan and some part of the material is exported to other nations.