Steel Industry demands import duties to be reduced to zero in Budget 2018
The year 2017 was an eventful year with three major reforms such as Demonetisation, GST, and Bankruptcy and Insolvency Code being passed by the government to address the issues of black money, cash economy and rationalisation of indirect taxes. It is expected that the last complete budget before the 2019 general elections will be an extension of these measures.
For the benefit of the steel sector the industry expects relaxations on import duty on raw materials as crucial for production of the alloy. Union steel secretary, Arun Sharma, recently said, all the important articles imported for the production of steel in the country should be free from import duty. It would take care of ferro nickel, ferro-molybdenum, ferro chromium, coking coal and scrap. Read On...
"We are deficit in steel scrap including for production of stainless steel. Our request is that the import duty on these should be brought down to zero so that input cost does not increase and as a result, steel prices do not increase. This will mean that the cost of infrastructure also gets stabilised," Sharma said.
Nikunj Turakhia, President of Steel Users Federation Of India (SUFI) said , it is important to note that the after effects of demonetisation and GST have started to dwindle and the economy seems to come back to normalcy. It is expected that India should bounce back to 7% + growth consistently and steps need to be taken in that direction.
"Major push to industries related to steel, cement and infrastructure is needed. Besides, to make Make In India successful, we need to make the Indian manufacturing sector efficient. The customs duty structure should be minimum on raw material, incremental on semi-finished and maximum on finished goods. Therefore rationalization of customs duty is a must," Turakhia said.
He also emphasised on an amendment to the Negotiable Instruments Act so that the nonpayment issues, especially in SME and MSME sector is addressed. "Sops to SME and MSME sector for funding from banks is needed as most of the banks are sitting on huge deposits but credit off-take is poor in this sector," Turakhia said.
Similarly, the stainless steel industry has asked the government to remove import duty on ferro-nickel and stainless steel scrap. In its pre-budget wish list, the Indian Stainless Steel Development Association (ISSDA) has sought removal of customs duty on key raw materials used in producing stainless steel.
"The government had removed customs duty on pure nickel in the last budget, it didn't help the industry much since most of nickel used by stainless steel makers is in the form of ferro-nickel," the ISSDA said. The same relief should now be extended to ferro-nickel, it demanded. The import duty on ferro-nickel is 2.5 per cent. The raw material has to be necessarily imported because India hardly has any nickel resources, the association said.
Secondary steel industry body All India Induction Furnaces Association (AIIFA) has urged the government to remove 2.5% import duty on steel melting scrap in the upcoming budget.
The joint planned committee (JPC) under the steel ministry has suggested abolition of basic customs duty on import of steel melting scrap, AIIFA secretary general Kamal Agarwal claimed, adding that the recommendation should be considered.
The AIIFA represents electric induction melting furnace industry which produces products like mild steels, low alloy steels and stainless steels and others.
Highlighting the role of overall metals recycling industry and its requirements, Navin Prakash Sharma, CEO of Gravita India, said metal recycling and overall recycling industry has been ignored in the past, but it can create millions of jobs in the country. The Chinese government has put recycling as its top most priority in its five-year plan. They have created recycling parks and zones in the country to boost the industry.
Now is the time for our government to give a specific preference for the sector that helps in saving our environment, natural resources and energy by addressing the following areas for the benefit of metal recycling industry.
"First there is a need for a National Metal Recycling Policy, especially to address recycling of old vehicles which are unsafe and not fuel efficient. Secondly, the corporate tax for the industry must be brought down to 20 per cent to make the industry competitive. Third, the import duty on all kinds of scrap must be zero as no other country levies a duty on scrap. And last but not the least, to boost exports, government should provide a preference or an incentive for recycled products," Sharma of Gravita India said.
- TradeBriefs Bureau -