Steel sector bullish on GST, exporters worry:

Steel sector bullish on GST, exporters worry:

Context

• GST has been recently launched. What is its effect across different industries is a much discussed issue now.

GST and Various Sectors

• Following the implementation of the GST, the hospitality and travel sectors expect teething issues in the first few months but are not unduly worried, expecting support from government.
• It is being expected that there may be challenges in compliance and implementation but over time, there will be more clarity and familiarity, enabling all stakeholders to adjust, adapt and adhere
• However, the Federation of Hotel and Restaurant Associations of India feels that the 28% GST for hospitality industry is too high.
• With regard to export industry, the Federation of Indian Export Organisations (FIEO) has approached the government to reduce the restrictions on using duty credit scrips — a pass that allows holders to import goods by not paying a certain amount in import duties
• With the implementation of GST, these scrips can now be utilized only for payment of basic customs duty and not Integrated Goods and Services Tax.
• Earlier, manufacturing exporters who imported raw material for export purposes were allowed to utilize these scrips for payment of customs, excise duty and service tax.
• Exporters are worried as they have to arrange funds for payment of GST, which will be refunded to them upon exports
• This may lead to a blocking of funds thus affecting competitiveness of exports.
• The steel sector is feeling bullish after the GST rollout. Players in the sector said that with GST, unorganized players will have to move to the organized form of doing business.
• Steel Users Federation of India has said GST has abolished the special additional duty on imported goods which was a very cumbersome procedure.
• It is being expected that GST will give the unorganized sector no other choice but to be tech-compliant.
• The cotton textile industry is also feeling positive because the entire cotton textile value chain has been brought under the lowest slab rate of 5% GST.