Equipment CoS Breathe Easy After GST Cut

Reduction in the GST on mining and construction equipment to 18% from 28% will help support infra development across segments. It is a big relief for most of the industry. But for 15%of the products, the rate continues to be 28%. Pre-GST duty was under 20%. Sales declined 35% in Jul’17 due to GST implementation. However, things returned to normal and the overall growth was not affected as the industry grew 19%in Q1 and 22% in Q2. And the industry will sustain this in the current fiscal. So far, only road construction has driven growth, but the Railways has also started to offer some opportunities. Leasing will become cheaper post-GST. Earlier, they had excise duty and sales tax, and on top of that service tax. The total rate worked out to 30-32%. Now, leasing CoS will charge only 18% GST. So, it will benefit them a lot.