IEEMA advocating electricity to be under GST

In its pre-budget memorandum to Finance Ministry, IEEMA made an appeal to bring electricity under the proposed Goods and Service Tax (GST) ambit. “As per model GST law, electricity has been kept outside the ambit of GST and the state would continue to levy electricity duty on sale of electricity,” stated the Association in the document.

The industry body said, “In case of work contracts executed in the nature of power transmission and distribution, EPC contractors, power plant, various purchases would charge GST to the Electricity and Power Transmission and Distribution Companies Credit of GST paid by the Electricity and Power Transmission and Distribution Companies to the EPC contractors would not be available and hence such credit would be an additional cost to the company.”

IEEMA suggested that electricity be subsumed within the scope of proposed GST. IEEMA has made suggestion on the issues pertaining the electrical equipment industry.

It also asked the government to remove import duties on CRGO Electrical Steel Cold Rolled Grain Oriented (CRGO) electrical steel is a critical raw material for manufacturing of transformers.

CRGO is fully imported as it is not manufactured in India. Currently, CRGO consumption in India is about 2.5 lakh MT/annum. Consumption is estimated as 11.5 Lakh MT for entire 12th Plan period (2012-2017) and 13.5 Lacs MT for entire 13th Plan period (2017-2022).
It suggested that the country needs to plan domestic CRGO availability strategically.