PHD Chamber hails the reduction in VAT in Steel

By 121 News Reporter

Chandigarh 27^th December:---- PHD Chamber welcomes the decision of the Punjab Govt to reduce the value-added tax (VAT), a long-standing demand of the basic steel manufacturers.

R S Sachdeva, Co Chairman of Punjab Committee of Chamber stated that it is a positive step and very important for the survival of the steel industry in Punjab, the biggest market in India that consists of furnaces and iron & steel rolling mills, re-rolling mills and pipe makers. He further said that as the VAT shall now be reduced to 2.5 per cent from 4.95 per cent,around 700 small and medium steel mills in Mandi Gobindgarh and Ludhiana are likely to benefit from the lower VAT. This will help the iron & steel industry in the state reeling under the disadvantages of being in a landlocked state and far away from ports besides other issues like expensive power, shortage of land etc to compete and raise revenues for them. R.S.Sachdeva added that it would also lead to elimination of tax evasion, besides increasing production by encouraging flow of scrap and raw material into the state. With reduced tax on import of scrap there would be increased liquidity available with the manufacturer which is very important for the viability of the unit.

Dalip Sharma, Director, PHD Chamber stated that such a move shall definitely boost up the production of iron and steel in the state and the industry will now be able to compete with the neighboring states which are enjoying tax benefits on large scale.