Punjab Steel cluster has achieved VAT to reduce

The Penjab government decided to reduce value added tax (VAT), satisfying the requirements of small and medium steel plants. At a meeting with representatives of dominant, rolling and pipe industries, deputy chief minister Sakhbir Singh Badal gave a green light to reduce VAT to 2.5 percent from 4.95 percent.

Badal claims that the new proposed VAT version for the metallurgical industry is aimed at ensuring that its products can compete with neighboring states. About 700 small and medium -sized steel plants in the region will benefit from VAT reduction. This will help the mining and steel industry compete in the international market and raise their income.

Facilitating the position of the metallurgical industry, VAT was attached to the consumption of units of electricity. After the introduction of the new system, the enterprise should strive to produce one million tons of finished steel with 250 units of electricity consumption, while units require 750 units of electricity to produce one ton of ingots. Badal said that this decision would increase the flow of scrap and raw materials to the state.

VAT restructuring will be implemented from February 1. Mokhinder Gupta, the owner of a steel factory, met with the deputy minister and welcomed new tax structures that are able to withdraw a cluster from a state of stagnation. Badal said that at first the new VAT regime will lead to a loss of income in the state treasury, but later it will contribute to the growth of income by increasing industry production.