Industry body Ficci has recommended a series of steps for the steel-making industry. Among the key changes, suggested by Ficci in its pre-Budget memorandum 2019-20, it has pitched for reduction in customs duty on a variety of materials used as key inputs in the steel-making process. "Availability of vital inputs, such as anthracite coal, coking coal, coke, pet coke, limestone and dolomite, in good quality is declining and the industry has to depend on their imports on a regular basis," Ficci has said.
Here are some of the recommendations by Ficci for the steel industry:
Exemption from import duty on pet coke
It is recommended that customs duty on pet coke be reduced from 2.5 per cent to nil.
Reduction in customs import duty on anthracite coal
The basic customs import duty on anthracite coal is 2.5 per cent. Since the ferro alloy industry plays a vital role in the manufacturing of steel, it is necessary to make available these reductants at international competitive price to make Indian steel mills more competitive.
It is recommended that customs duty on anthracite coal be reduced from 2.5 per cent to nil.
Reduction in basic customs duty on met coke to nil
The basic customs duty on metallurgical coke has been placed at 5 per cent. Coking coal, steam coal and met coke are key inputs in steel making, accounting for a substantial portion of cost of steel production.
The coke prices have surged sharply in recent months. As a result, the cost of this vital input in steel manufacturing has gone up necessitating the increase in the price of steel which is acting as deterrence to the competitiveness of domestic products in international markets.
If the duty is reduced, it will help the domestic steel industry to be cost competitive.
Reduction in customs duty on coking coal to nil
The 2.5 per cent customs duty on coking coal has increased the cost of steel-making substantially and rendered the domestic steel being uncompetitive vis-a-vis imports. This has adversely affected the steel manufacturers in the country. It is recommended that the customs duty on coking coal be reduced to nil from 2.5 per cent.
Here are some of the other recommendations by Ficci:
- Exemption of import duty on ferrous and stainless steel scrap
- Reduction in basic customs duty on graphite electrodes from 7.5 per cent to nil, imposition of 30 per cent export duty
- Increase in basic customs duty for certain steel products from 10 per cent and 12.5 per cent to 25 per cent on steel imports such as hot rolled steel, cold rolled steel, galvanised steel, colour coated steel, wire rods
- Increase in Basics Customs Duty on alloy steel bars and wire rods (steel long products) from 10 per cent to 15 per cent
- Increase of effective basic import duty on stainless steel flat products from 7.5 per cent to 12.5 per cent at par with other steel products