In your issue of 12th June 2007, your correspondent writes: "Steel prices shoot up by Rs 2,750 per tonne" and the reason given is the increase of GST by 5% in the recently announced Budget. Such type of headlines always creates panic amongst traders if not properly and accurately researched and reported.
Factually speaking it is a very wrong interpretation of the budgeted item - S.T. Rate remains unchanged as 15% on the end-product eg steel pipe and Round Bars. ST 5% has been increased only on Raw Material being used by manufacturers eg H.R. Coils for producing steel pipes and billets for round bars which is refundable/adjustable if they sell their end product ie steel pipe made from HR coils and Round Bars made from billets to a genuine buyer against a genuine invoice.
This has been done apparently to force those who are still trying to avoid proper documentation. Now they will have to generate genuine invoice to claim 5% S.T. paid in excess by them on purchase of raw material.
Further it is also not correct to report that application of new ST Rate from 9th June 2007 was extraordinary measure. All changes in duty and ST have always been effective from the budget date and that is why budgets are usually announced one day before holiday.
A newspaper like Business Recorder is expected to report specially business news more professionally and correctly. The Reporter should understand the law and logic behind such news item so as to present the correct and true picture.
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