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Govt re-imposes steel import duty
BS Reporters in New Delhi | November 19, 2008 11:56 IST
The government has imposed an ad valorem import duty of 5 per cent on pig iron, semi-finished, flat and long steel products. An import duty of 20 per cent has also been imposed on crude soybean oil with immediate effect.
The domestic steel industry had been lobbying for a 10 per cent import duty to discourage imports and provide support to the falling domestic prices.
According to steel industry, cheaper steel import was contributing to its sagging sales. Leading steel companies like Steel Authority of India Ltd and JSW have witnessed a 25-30 per cent dip in consumption demand.
The finance ministry in a press statement said these measures were introduced 'in the wake of the recent fall in the international prices of commodities and with a view to safeguard the interests of domestic producers'.
At present, both iron and steel items like pig iron, semi finished, flat and long steel along with crude soybean oil enjoy complete duty exemption.
However, industry experts said the import duty is not going to provide any relief against cheaper imports. "Companies in Ukraine and China are offering steel at a price of $430-440 a tonne.
A 5 per cent duty would push the cost of imported steel by nearly Rs 1,100 a tonne, while the gap between imported and domestic steel price is about Rs 10,000 a tonne.
"By imposing this duty, the government has accepted the industry's demand, though partially, and at the same time ensured that cheaper import continues," said trade sources.
Domestic steel producers had taken a price cut of 12-14 per cent or Rs 5,000-5,500 a tonne earlier this month to boost sales. However, the situation has not improved so far and producers might have to go for another round of price cut.
In order to simplify the refund-based service tax exemption scheme on taxable services attributable to exports, the time limit for filing refund claims has been extended from 60 days to six months.
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