Chhattisgarh government issued a notification, in which, it has increase VAT on re-rollable steel products by 1% w.e.f 1 Apr’16. Now, VAT will be charged at the rate of 5% on all re-rollable items, including rebar, wire rod, structure, round, flat and pipe, which was 4% earlier.
In last state budget FY16, the CG government had revised VAT from 5% to 4% to make steel cheaper to state based end users. CST remains unchanged to 2%.
In the state, there are about 220 steel rolling mills. Out of these, Raipur and Raigarh are the two major industrial hubs in the state. As per a rebar manufacturer based in Raipur, after increase in VAT by 1% in the state, rebar prices to end users are likely to increase by around INR 300/MT.
Presently, most of the medium size rebar manufacturers in Raipur are offering 12 mm rebar at around INR 26,000/MT (basic price), which will now cost to end users after all taxes at INR 31,500/MT. Earlier with 4% VAT, it was assessed at INR 31,200/MT.
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