Reduce GST 18% to 5% on Steel, demands FICO
The Federation of Industrial & Commercial Organization (FICO) has demanded a reduction in GST on steel from 18% to 5% to provide relief to MSMEs and resolve the issue of the inverted duty structure affecting the engineering sector.
City Air News
Oct 28, 2026 07:35
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Ludhiana, October 28, 2026: The Federation of Industrial & Commercial Organization (FICO) has demanded a reduction in GST on steel from 18% to 5% to provide relief to MSMEs and resolve the issue of the inverted duty structure affecting the engineering sector.
Gurmeet Singh Kular, President, FICO, met Sunil Singhi, Chairman, National Traders Welfare Board, and submitted a memorandum requesting the reduction of GST on steel to 5%.
Kular explained that the bicycle industry, sewing machine industry, and agricultural implements industry, including tractor parts manufacturers, are among the sectors most affected by the inverted duty structure. These industries purchase raw materials at 18% GST, while their finished products are sold at 5% GST. As a result, Input Tax Credit (ITC) keeps accumulating, blocking a large amount of working capital.
He further stated that in many cases, the pending GST refund amount is even higher than the bank limits available to industrialists. This creates a serious shortage of working capital, increases dependence on bank finance, and puts additional financial pressure on MSMEs.
He emphasized that steel is a key raw material for the engineering sector and requested the Government to reduce GST on steel to 5%, on similar grounds as the reduced GST rate on thread, a key raw material for the textile industry. This step would reduce production costs, ease the financial burden on manufacturers, and improve the competitiveness of Indian industry.
FICO urged Sunil Singhi to take up the matter with the concerned authorities and support the demand for GST rationalization in the larger interest of MSMEs and the manufacturing sector.
CA Vishal Garg was also present with them.
