Steel sector seeks basic customs duty cut on key raw materials
A uniform GST would also push the usage of environment-friendly natural gas in the energy basket from the current 6.2 per cent to 15 per cent by 2030, as desired by the Government
With just days left before the much-anticipated Union Budget, steel industry continues to be embroiled with multiple challenges with decline in production by 10.6 per cent in 2020 to 99.6 MT from 111.4 MT in 2019.
In view of the current trends in the industry, steel prices have skyrocketed to multi-year highs and there have been rattling price revisions by steelmakers post the lift of lockdown in 2020.
Indian Steel Association (ISA), which represents all the major public and private sector steel enterprises in the country, on Thursday shared its wishlist with Bizz Buzz. The association has suggested reduction on Basic Customs Duty (BCD) on Ferro Nickel to zero from current rate of 2.5 per cent along with lowering of Basic Customs Duty on Stainless steel scrap from current 2.5 per cent to zero.
ISA has recommended zeroing down Basic Customs Duty on anthracite/coking coal from 2.5 per cent and proposed Input Tax Credit (ITC) to be made available for natural gas at least for core industrial sectors like steel, cement and power, which generates more employment and revenue to the exchequer.
"A uniform GST would also push the usage of environment-friendly natural gas in the energy basket from the current 6.2 per cent to 15 per cent by 2030, as desired by the Government. It is suggested that petroleum products and electricity may also be brought under GST at an early date so as to allow input tax credit thereon without break in the chain of credit. Electricity duty may also be brought under GST so as to minimize the cascading effect of taxes," Indian Steel Association said in a statement.
"Reduction of rate of GST for steel products to rejig the existing GST rate of 18 per cent to a suitable rate and should not be more than 12 per cent. Reduce Basic Customs Duty on graphite electrodes from 7.5 per cent to NIL," the statement added.
In December 2020, ISA had written a letter to the Prime Minister demanding that the iron ore exports be banned for six months. Industry experts and associations of iron and steel forging manufacturers echoed similar sentiments against iron ore exports.
The Central government is also taking various measures to ensure adequate raw material availability for the steel sector, including auction of several iron ore mines in Odisha in Q4 of FY2020 and amendment in the Mines and Minerals (Development and Regulation) Act, allowing the transfer of existing forest and environment clearances of expiring mining leases to new lease holders for a period of two years.