New Delhi, Feb. 28
THE metallurgical industry, particularly steel, has received a boost through duty rate adjustments in the Budget.
The import duties on stainless steel, alloy steel and other ferro-alloys have been reduced from the existing 15 per cent to 10 per cent. Simultaneously, the Budget proposes to increase the excise duty on steel from the existing 12 per cent to 16 per cent.
For inputs required for the manufacture of steel, the Budget has proposed to cut down the customs duties on a large number of items. These include refractories, graphite electrodes and raw materials for refractories, namely, natural graphite powder, aluminus cement, boron carbide, reactive alumina, silicon metal of 99 per cent purity, phenolic resin and sintered/tabular and fused silica.
The steel industry imports huge quantities of coking coal annually because India doesn't have sufficient quantities of coking coal. The industry has been pleading for a duty reduction on coking coal. The Budget has proposed to bring down the import duty on coking coal with high ash content from the existing 15 per cent to 5 per cent.
For other primary and secondary metals, the Budget has proposed to reduce customs duties from 15 per cent to 10 per cent. These metals include aluminium, copper, zinc, tin and base metals such as tungsten, magnesium, cobalt and titanium. Welcoming the Budget, the President of the Indian Steel Alliance (ISA), Mr Moosa Raza, said that the "assurance of the Finance Minister for stable tax policies to help raise and sustain investment is especially welcome for the steel industry, which is looking to cross 100 million tonnes of steel capacity by 2020. The reduction in customs duties on some of the raw materials and intermediaries, including refractory materials and coking coal, should help the industry in the long-run to reduce cost."
"However, the increase in excise duty by 4 per cent on steel would increase the cost for the consumer to that extent," he said.
Reacting to the Budget proposals, the Chairman of the Sponge Iron Manufacturers Association , Mr Sandeep Jajodia, said, "The reduction in customs duty on coking coal will help to reduce the input cost for the steel industry. Plans to use foreign exchange reserves for infrastructure building and substantial Budget allocation to the rural and social sector would increase the demand and consumption of steel."