The Hindu Business Line : Budget unlikely to alter steel duty structure

THE Government is unlikely to respond to demands made by big steel producers to raise the import duty of seconds and defective steel products. Government sources said any more changes in the import and export duty structure of steel products in the coming Budget is unlikely.

This is because already during the course of the year, the duty structure for steel products has been amended more than once, with the latest round being at the end of December.

Following representations from secondary steel producers, the Government reduced the import duty on seconds and defective from 40 per cent to 20 per cent in the last week of December. Prior to that, it had made changes in duty rates in the first and second quarters of the year because of disparities in domestic and international steel prices.

Now, the big steel companies have approached the Government with their request to increase the duty and take it back to the earlier level of 40 per cent.

A Steel Authority of India Ltd official told Business Line that the import of seconds and defectives must be restricted.

"No country in the world imports so much defectives. It is not proper to bring in defectives within the country. Now since such imports cannot be banned, which would attract certain World Trade Organisation (WTO) provisions, the duty must be retained at the highest possible level," he said.

Government officials said during the year duties applicable to steel items as well as various export incentives had been adjusted several times to suit the situations arising out of overall high global steel demand and the price differential between the domestic and international markets.

"Right now there is a sort of balance between demand and supply," the officials said. However, because steel has become extremely price-sensitive over the last two years, the Government would not decide in haste, he said.

Meanwhile, the Joint Plant Committee of the steel industry set up by the Steel Ministry is closely monitoring the demand-supply condition and price movements of steel products. The Ministry's final decision would to some extent depend on the input gathered by the committee, the officials said.

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