Local Indian hot rolled coil (HRC) prices have remained stable during the past week at INR 38,500/mt ($598/mt) ex-works even though market activity has fallen sharply ahead of a new indirect tax regime to take effect within two weeks, traders said on Monday, June 19.
“There is no interest among market participants in stepping up their transaction activity. Demand continues to be sluggish. Dealers are also unwilling to take risks amid the uncertainties of the new tax regime,” a Mumbai-based trader said.
“With the new indirect tax regime starting July 1, no dealer wants to get stuck with two different stocks attracting two different rates of tax and resultant issues of filing compliances. Accordingly, all dealers are busy reducing stocks as much as they can rather than concluding fresh transactions,” he added.
The Goods and Service Tax (GST) to take effect will be implemented at a uniform rate of indirect tax across the country, replacing all other taxes like VAT and local levies imposed by state governments.
$1 = INR 64.4