Monday, June 15, 2009
Steel ministry for higher duty on iron ore
The ministry is also learnt to have favoured 15% import duty on steel items to check dumping from countries like China and Ukraine
New Delhi: The Steel Ministry is understood to be pushing for 15% export duty on iron ore, besides a similar percentage of import duty on vital steel items to protect the interests of the domestic steel industry.
In a draft proposal, which may have undergone changes, the ministry is believed to have backed an ad valorem duty of 15% on exports of iron ore fines and lumps to meet the growing domestic demand on account of the massive expansion lined up by steel companies.
The ministry is also learnt to have favoured 15% import duty on steel items to check dumping from countries like China and Ukraine.
When contacted to throw light on the matter, Steel Secretary P K Rastogi said, “All these are speculation. We have got nothing to comment on it.”
Given the prevailing market rate of $50-60 a tonne, the government may earn a little over Rs4,000 crore if it imposes 15% duty on exports of iron ore.
At present, there is no export duty on iron ore fines while shipments of iron ore lumps carry a levy of 5%.
The import duty applicable on steel products is 5% which the industry finds insufficient and wants it to be increased to 20%.
Steel Minister Virbhadra Singh had last week stressed on value-addition in the mineral within the country, citing the 124 million tonnes targeted annual production capacity by 2011-12.
When asked, if the ministry is in favour of enhancing the import duty on steel, Singh had said that the government is to take a decision on it.
In an effort to stimulate the recession hit sector, the government had last year scrapped the 8% duty on iron ore fines and lowered that on iron ore lumps to 5% from 15%.
The government had also slapped a 5% import duty on steel items to check cheaper inflow of the commodity.
In terms of production, India is the world’s fifth largest producer of steel with annual volumes pegged at around 55 million tonnes. The country is also a leading exporter of iron ore, with total shipments hovering over 100 million tonnes per annum.
