Industry seeks lower steel GST to ease MSME cash flow
Ludhiana’s engineering industry sought a cut in steel GST from 18% to 5% to reduce input tax credit accumulation and ease MSME working capital pressure. OI Charts data showed mixed futures positioning across major steel producers.
pre-market1 source ↓machine-written, see hownot a recommendation
- HINDALCO close
- ₹886.30
- On the day
- -0.83%
- Futures OI, short build-up
- +2.4%
- Put-call ratio
- 0.93
- Max pain
- ₹900.00
Ludhiana’s engineering industry has sought a reduction in GST on steel from 18% to 5%, arguing that the current rate is worsening the working capital strain faced by micro, small and medium enterprises. The demand was submitted by the Federation of Industrial & Commercial Organization to National Traders Welfare Board chairman Sunil Singhi on 29 Oct 2026.
The issue arises from an inverted duty structure: manufacturers of bicycles, sewing machines, agricultural implements and tractor parts pay 18% GST on steel and other inputs, while many finished products attract 5% GST. This creates an accumulation of input tax credit and delays the release of cash tied up in refunds. FICO president Gurmeet Singh Kular said pending GST refunds were, in several cases, higher than the bank credit limits available to industrialists. 5% steel GST demand therefore directly targets liquidity rather than end-market demand. 🏭
Key market context from OI Charts data as of 29 Oct 2026:
- Hindalco closed at ₹886.30, down 0.8%, with futures open interest up 2.4% in a short build-up. Its 20-session move was -9.3%; the ₹900 strike held the largest call and put open interest, with max pain at ₹900.
- JSW Steel gained 1.1% to ₹1,255, while futures open interest fell 1.4% in short covering. Its largest call and put open interest stood at ₹1,200, against max pain of ₹1,220.
- Tata Steel edged up 0.1% to ₹169.46, with futures open interest up 0.4% in a long build-up. The ₹170 strike had the largest call and put open interest, while max pain stood at ₹175.
The proposal could improve cash conversion for downstream engineering units if accepted, but the article reported a demand rather than an announced GST Council decision. The immediate sector signal is therefore focused on refund timelines, input-credit balances and any formal government response. For the steel producers, positioning remains mixed: short build-up accompanied Hindalco’s decline, while JSW Steel showed short covering and Tata Steel recorded modest long build-up.
The next developments to watch are a response from the GST authorities, consideration by the GST Council and any clarification on the treatment of accumulated input tax credit. The November futures expiry is 23 Nov 2026, with 25 days remaining as of the OI Charts data date.
Source: The Times of India, 29 Oct 2026
Not investment advice. For informational purposes only.