Domestic steel makers like SAIL and JSW Steel will benefit from the hike in customs duty flat steel products.
The Finance Minister, Mr Pranab Mukherjee, hiked the basic customs duty on non-alloy, flat-rolled steel to 7.5 per cent from the present 5 per cent.
“It will make the imports costlier by about Rs 1000-1500 per tonne,” said SAIL Chairman, Mr C.S.Verma. Such carbon flat products, imported largely from China are mainly used in manufacture power equipment.
Further, the boost to infrastructure sector through higher allocation in 12th Plan will trigger more demand for steel, Mr Verma said.
The cut in import duty on thermal coal will also marginally benefit the steel makers, who run captive power plants. Steel makers like SAIL and JSW Steel will also benefit from the reduction of customs duty on coating material for manufacture of electrical steel from 7.5 per cent to 5 per cent.
VALUE ADDITION
The cut in customs duty on imported pellet making equipment will promote value addition, Mr Verma said. SAIL is in the process of setting up a pelletisation plant at Gua mines in Jharkhand.
The customs duty on machinery for pellet making and beneficiation plant has been reduced to 2.5 per cent from 7.5 per cent in a bid to encourage the use of iron ore fines.
Last year, the Government had exempted duty on exports on iron ore pellets. The present pellet capacity in the country is estimated at 18 million tonnes.
The Budget 2012-13 also proposes to enhance export duty on chromium ore by Rs 3000 per tonne to 30 per cent ad valorem. “The export duty on chrome ore will help conserve natural resources while giving a boost to value addition,” said Mr Subhrakant Panda, Managing Director, IMFA.
MINERAL PROSPECTING
In a bid to encourage mineral surveying and prospecting, the Finance Minister has proposed to reduce duties on equipment import.
“I propose to reduce basic customs duty on machinery and instruments for surveying and prospecting from 10 per cent or 7.5 per cent to 2.5 per cent. In addition, full exemption from basic customs duty is being provided to coal mining projects,” Mr Mukherjee said.
However, the duty cut will not be of much help as a huge number of applications are pending with various state governments, said Mr R.K.Sharma, Secretary General of Federation of Indian Mineral Industries (FIMI).