Budget 2013: Increase basic customs duty on steel melting scrap to 10 percent, asks SIMA
NEW DELHI: The Sponge Iron Manufacturers Association (SIMA) has asked for an increase of basic customs duty on steel melting scrap from 0 to 10 percent in Budget 2013.
In its pre-Budget memorandum, SIMA said import of steel melting scrap in current financial year from April 2012 to January 2013 has broken all the records.
"India's import of scrap may touch around 8 million tonnes in the current financial year leading to valuable foreign exchange outgo of the order of about $3.5 - 4 billion and will therefore contribute significantly in the much talked current account deficit (CAD)," it said.
The reasons for this substantial increase in the import of steel melting scrap may be attributed to steel production is not matching to demand, no green field steel plants coming up in the country and zero customs duty on steel melting scrap.
"Such huge import of scrap is killing Indian sponge iron industry which is already burdened with the rising cost and restricted availability of inputs like iron ore, non coking coal and natural gas," SIMA said.
In the light of the above, there are enough justifications for the GOI to increase basic customs duty on steel melting scrap from 0% to 10%, it added.
Regarding iron ore, it said taht due to various reasons iron ore production is continuously reducing resulting restricted availability and wild fluctuation in its prices. It is imperative that import duty & inverted structure of duty (excessive duty on import of raw material rather than on FG) is corrected to improve the availability of iron ore to the iron and steel producers.