The Federation of Industrial and Commercial Organizations (FICO) called on the government to lower and streamline the Goods and Services Tax (GST) on iron and steel from 18% to 12%.
FICO in a written memorandum addressed to the Union Steel Ministry and GST council stresses the requirement for a lower tax imposition to increase the financial strain on manufacturers, particularly in the industry of bicycle parts.
FICO president Gurmeet Singh Kular, general secretary Manjinder Singh Sachdeva, and bicycle division head Harpal Singh Bhamber cited that the existing GST structure on raw materials builds a 6% differential.
There is an 18% GST on the iron and steel, key raw materials for cycle parts, and a 12% GST on the finished bicycle parts. As per the federation, the exact discrepancy makes the manufacturers apply for refunds, which is not easy and is a longer process.
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As per FICO reducing the GST on iron and steel shall align the same with the tax rate on bicycle parts, facilitating the tax structure and improving the cash flow for the sector.