The Federation of Industrial and Commercial Organizations (FICO) on Monday urged the Centre to reduce and rationalise the Goods and Services Tax (GST) on iron and steel from 18% to 12%. In a written memorandum addressed to the Union steel ministry and GST council, FICO emphasised the need for a lower tax levy to alleviate ‘financial strain’ on manufacturers, especially those in the bicycle parts industry.

FICO president Gurmeet Singh Kular, general secretary Manjinder Singh Sachdeva and bicycle division head Harpal Singh Bhamber said the current GST structure on raw materials creates a notable 6% differential. It said that iron and steel, key raw materials for cycle parts, are taxed at 18% and finished bicycle parts incur a GST of 12%. The federation said this discrepancy has forced manufacturers to apply for frequent refunds, which it said is ‘arduous and time-consuming’ process.

According to FICO, lowering GST on iron and steel would align it with the tax rate on bicycle parts, simplifying the tax structure and enhancing cash flow for the sector.

Source: The Hindustan Times