Govt for hiking duty on iron ore & steel products

Ministry is said to be pushing for a 15 per cent increase in the levies

 
In a draft proposal, which may have undergone changes, the ministry is believed to have backed an ad valorem duty of 15 per cent 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 per cent import duty on steel items to check dumping from countries like China and Ukraine.

Given the prevailing market rate of US$50-60 a tonne, the government may earn a little over Rs 4,000 crore if it imposes 15 per cent 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 per cent.

Insufficient import levy

The import duty applicable on steel products is 5 per cent which the industry finds insufficient and wants it to be increased to 20 per cent.  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 the government is to take a decision on it. The government had last year scrapped the 8 per cent duty on iron ore fines and lowered that on iron ore lumps to 5 per cent
from 15 per cent.

The government had also slapped a five per cent import duty on steel items to check cheaper inflow of the commodity.