GST Council Puts Coal in 5% Tax Slab: Electricity, Steel Production Costs to Go Lower

The GST Council kept coal at the lowest tax slab of 5%,which is down by 6.69% from the hitherto tax incidence of 11.69%.

As the direct outcome, prices of steel products are expected to be stabilized, and power tariffs will become lower.

Industry insiders believe that the lower tax structure for coal will bring down the input cost for steel production, and that will impart stability in steel prices. The new taxation on coal will also provide fillip for the existing steel plants in the country to undertake more capacity expansion.

The 5% GST on coal will also render electricity more affordable by lowering the tariffs. Electricity, a vital input for industry, will be cheaper, to reduce the input costs. The reduction in the tax incidence on coal will result in a reduction of 6-7 paisa per unit in electricity generation cost.