Sponge Iron Manufacturers Association (SIMA), in a pre-Budget memorandum, urged the government to raise customs duty on sponge iron to 10 per cent from the current level of 5 per cent in the union budget 2013-14.
The association wants the government to raise duty in order to reduce the rising import of sponge iron. The industry body said import of steel melting scrap in current financial year from April 2012 to January 2013 has broken all the records.
In the current financial year, import of scrap may touch around 8 million tonne leading to valuable foreign exchange outgo of the order of about $3.5-4 billion and will therefore contribute significantly in the much talked current account deficit (CAD), it said.
SIMA also asked for an increase of basic customs duty on steel melting scrap from 0 per cent to 10 per cent.
The association cited excess demand for steel, lack of greenfield steel projects, and zero customs duty on steel melting scrap as reasons for the rise in the import of the scrap.
Indian sponge iron industry is suffering from severe competition from imported scrap besides being burdened with the rising cost and restricted availability of inputs like iron ore, non coking coal and natural gas, SIMA said.
Therefore, it called for raising basic customs duty on steel melting scrap from 0 per cent to 10 per cent.
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