Indirect tax on iron ore will be reduced to five percent from current rate of 12.5 percent under India’s reformed Goods and Service Tax (GST), scheduled to take effect as of July 1, 2017, a senior Indian government official said on Monday, May 22.
The government official said that the indirect tax or excise duty rate applicable for iron ore has been fixed at the lowest of the four rates of five percent, 12 percent, 18 percent and 28 percent which have been proposed in the uniform countrywide rates to be applicable for all goods produced.
The five percent rate applicable for iron ore will also subsume all local levies and taxes that various provincial governments impose on iron ore produced within their respective geographies, he said.
With excise duty on coal also fixed at the lowest level of five percent, the lower indirect tax incidence for both coal and iron ore and the uniform rates of tax across the country will significantly bring down input costs for domestic steel mills, the official added.