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Assocham for reforming duty structure in steel sector

Assocham for reforming duty structure in steel sector

Government received a request from industry body Assocham to remove the inverted duty structure prevailing in the steel sector.

Assocham said the present duty structure between finished steel and Iron ore denies an opportunity to steel sector for value addition and it called for exemption iron ore import from basic custom duty and countervailing duty as in the case of coal in a bid to revive steel industry.

The chamber further said, the domestic steel production is going through a rough phase owing to non-availability of iron ore. In view of Supreme Court’s decision to impose a production cap in the state of Karnataka and suspension of all mining activities in the state of Goa and additional regulatory measures, the iron ore production is bound to remain at stagnant levels for obvious reasons, it said.

The chamber said the present duty structure will have a cascading impact on the economy putting at risk not only the huge funds invested by FIs and Banks but also employment.

According to a note submitted by the chamber, import of Finished Steel Products from FTA (Free Trade Agreement) countries of South Korea, Japan and ASEAN, land at a high concessional duty rates into India as compared to normal duty rates from other countries.

It added that from January 1, 2013, these concessions would further increase resulting into many steel products turning cheaper and landing at 2.5 per cent import duty while some others would be imported with as low a duty rate as one per cent from South Korea.

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