Implementation of the Goods and Service Tax (GST) is almost a month away. The hype is making various businesses and consumers equally jittery. However, Mohit Aggarwal, the CMD of Aastha Group, is looking forward to this revolutionary Act and the changes it will bring to the Indian economy. According to Mohit Aggarwal, a single consolidated tax is easier to track and it considerably brings down corruption across the industries. Moreover, the sun might shine more in the way of the steel and coal companies. It seems the impact GST will create a special wave in Aastha Group.
Energy and mining minister, Piyush Goyal, also announced GST council’s decision to assign the lowest slab of 5% to the coal industry. The tax rate for coal at present is 11.69%. Cutting down the cost is a mere side-effect.
According to Goyal, the aim is to make ‘one nation, one tax’ a reality. Renewable energy sources like solar energy will not be free from high tax slabs but it will not affect their tariff. Mohit Aggarwal has planned to step in the renewable energy sector with biomass on the table. Biomass enterprises might see a little spike in the costs since GST might end the fiscal incentives energy sectors enjoy.
Steel companies like JSW Steel, TATA Steel, SAIL, and Aastha Group will benefit greatly by GST as the costs of coal and iron ore will fall. The GST rate stands at 18% for these companies. With a reduction in logistic costs and lower input expenditure, steel companies can reel in more profit and clear their debts. Direct consumers won’t have to pay a lot for TMT bars and steel items. Like a domino, the fall of prices of metallic products will also cause real estate prices to tumble.
Mohit Aggarwal is eagerly waiting for July 1 as it’s the day the GST act will be put in effect. To sum up the whole story, expect lower energy tariffs, low real estate prices, and low metallic instrument prices due to low coal and steel prices.