Budget 2023: Tata Steel, Jindal Steel shares climb up to 6% as FM extends duty exemption on inputs

Shares of steel sector such as Tata Steel, JSW Steel, Jindal Steel, Hindustan Zinc and Hindalco were on fire today after FM Nirmala Sitharaman announced a set of measures for the steel producers. The custom duty exemption on manufacturing of cold rolled grain oriented (CRGO) steel and ferrous scrap will continue, said FM Sitharaman during her fifth Budget speech.

The exemption from basic customs duty (BCD) on import of ferrous scrap of HSN 7204 (including iron and stainless steel waste) has been extended for one more year and will be available up to March 31, 2024. The Nil rate of BCD was set to expire on March 31, 2023.

Check Share Price Live: Jindal Steel 

This BCD exemption was originally introduced in 2021 before which BCD of 2.5% was levied on such raw materials used in secondary steel manufacturing. 

Buoyed by the development, Tata Steel stock zoomed 3.76% to Rs 124.15 against the previous close of Rs 119.65 on BSE. Tata Steel shares are trading higher than the 5 day, 20 day, 50 day, 100 day and 200 day moving averages. Earlier, the stock opened on a flat note at Rs 120. Market cap of the firm stood at Rs 1.49 lakh crore on BSE. A total of 23.96 lakh shares of the firm changed hands, amounting to a turnover of Rs 29.32 crore.  

Similarly, Jindal Steel stock touched a fresh 52 week high of 622.4, rising 6.68% on BSE.  

Jindal Steel shares are trading higher than the 5-day, 20-day, 50-day, 100-day and 200-day moving averages. Market cap of the firm stood at Rs 62210 crore on BSE. A total of 2.13 lakh shares of the firm changed hands, amounting to a turnover of Rs 12.96 crore.  

Shares of another steel major JSW Steel touched an intraday high of Rs 738.5, rising 3.05% on BSE. JSW Steel shares are trading higher than the 5 day, 100 day and 200 day moving averages but lower than 20 day and 50 day moving averages. Market cap of the firm rose to Rs 1.76 lakh crore on BSE. A total of 0.52 lakh shares of the firm changed hands, amounting to a turnover of Rs 3.79 crore.  

 Similarly, shares of Hindalco touched an intraday high of Rs 480.65, rising 2.58% on BSE. JSW Steel shares are trading higher than the 5 day, 100 day and 200 day moving averages but lower than 20 day and 50 day moving averages. Market cap of the firm rose to Rs 1.05 lakh crore on BSE. A total of 2.17 lakh shares of the firm changed hands, amounting to a turnover of Rs 10.31 lakh crore. The stock has gained after three days of fall.  

  The BSE  metal index too rallied 471 points intraday to 21,623 against the previous close of 21,152.  

“To facilitate availability of raw materials for the steel sector, exemption from Basic Customs Duty (BCD) on raw materials for manufacture of CRGO Steel, ferrous scrap and nickel cathode is being continued. Similarly, the concessional BCD of 2.5 per cent on copper scrap is also being continued to ensure the availability of raw materials for secondary copper producers who are mainly in the MSME sector,” said  Sitharaman during the Budget speech .

Harsh Shah, Partner, Economic Laws Practice said, “The continuation of exemption for one more year comes as a huge impetus to the secondary steel manufacturing industry in the country, which is estimated to be contributing around 35% to total steel production in India." 

"The industry will now looking forward to the relief on GST front for which various representations are said to have been made before the Ministry of Steel and Ministry of Finance. On the GST front, the industry has been facing difficulties in domestic procurement of raw materials (ferrous scrap) since the supplier scrap dealers are mainly an unorganised sector. To avoid loss of credit arising due to non-payment of GST by such suppliers to the Government, the industry has been demanding relief inter-alia in terms of bringing down the applicable GST rate on such scrap from 18% to 5% to increase compliance or introduction of reverse charge mechanism whereby manufacturers as purchaser of such scrap may be permitted to deposit tax on such transactions” Shah added. 
 

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