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The aluminium industry has sought inclusion of items produced in SEZs and export oriented units (EoUs) within the ambit of the new input duty remission scheme for exporters announced by the government as it contends that exclusion would hit global competitiveness of Indian exports, especially against China.
In a letter to Commerce & Industry Minister Piyush Goyal, the Aluminium Association of India pointed out that there was also no justification for keeping products covered under the Advance Authorisation scheme out of the new Remission of Duties and Tariffs on Exported Products (RoDTEP) scheme, as it did not provide complete zero-rating (remission of all input levies) of the exports.
RoDTEP, which remits all input duties and taxes paid by exporters that are not refunded under other schemes, including embedded taxes such as octroi and road tax, has replaced the Merchandise Export from India Scheme (MEIS). The MEIS was rejected by the World Trade Organization on the ground that the refunds were not transparently calculated.
Advance Authorisation scheme
Almost half of India’s aluminium exports will not qualify for RoDTEP as the guidelines excluded exports from SEZs, EoUs and products covered under the Advance Authorisation scheme, the letter pointed out.
“Indian aluminium exports are struggling to remain globally competitive due to high incidence of un-rebated Central & State taxes and duties, constituting 15 per cent of aluminium production cost which is amongst highest in the world. This is adversely impacting the sustainability & competitiveness of the aluminium industry. Major exporting countries, especially China, extend support measures to enhance export competitiveness,” the letter pointed out.
According to the aluminium industry, the MEIS regime was also applicable on such exports, including those made through non-EDI ports. “In fact, the MEIS gave the necessary impetus to the domestic aluminium industry to compete in the global market, resulting in net increase of exports in the last couple of years,” the letter stated, adding that the government should consider extending the scheme for all the mentioned categories.
India is among the top aluminium exporters in the world with shipments in 2021-22 valued at $5.7 billion in 2020-21.
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