Sector report: Steel
Inputs
Nickel oxide, alloyed nickel, ferro nickel, power, coal, iron ore
Outputs
Hot rolled coil, cold rolled coil, galvanised products etc.
Key players
Steel Authority of India, Essar Steel, Tata Iron and Steel, Jindal Iron & Steel, Jindal Vijaynagar Steels, Jindal Strips, Mahindra Ugine Steel, Mukand, Electrosteel Castings, Ispat Industries.
Tax structure
|
Custom Duty (%) |
|
|
Item |
1999-2000* |
|
Hot Rolled Coils |
27.5 |
|
Cold Rolled Coils |
38.5 |
|
Cold Rolled Sheets |
38.5 |
|
Structural Wire Rod |
38.5 |
|
Pig Iron Tin Mill |
16.5 |
|
* excluding special additional duty at 4 per cent and countervailing duty as applicable |
|
|
Excise Duty (%) |
|
|
|
Item |
1998-99 |
1999-2000 |
|
Steel Products |
15 |
16 |
Background
- The steel industry has been a major contributor to the exchequer. The contribution of this industry to excise and customs revenue is 8.6 per cent and 4.8 per cent respectively.
- During April-November 1999, the production of finished steel has grown by 11.6 per cent against the corresponding period of the previous year.
- The government has taken the following steps to protect the domestic industry: a) Fixing floor prices for imports of hot rolled coils and sheets and cold rolled coils, tinplates, electrical sheets, plates, alloy steel bars and rods, b) Imposition on anti-dumping duties on import of hot rolled coils from Ukraine and Russia, c) Rationalisation of customs duty rates on inputs used by the steel industry.
Budget expectations and recommendations
- The Cold Rolled Steel Manufacturers Association of India has recommended the following changes in customs duty structure: a) Reduction in customs duty on zinc to 16 per cent from 35 per cent and b) Reduction in import duty on hot rolled coils to 20 per cent from 25 per cent
- The industry wants excise duty on sponge iron to be reduced to 8 per cent from the current level of 16 per cent.
- In order to facilitate offtake by the construction sector, the steel industry has called for a reduction in excise duty on galvanised sheets to 8 per cent from 16 per cent. Stainless steel manufacturers want reduction in the customs duty to 5 per cent for two key inputs -- unalloyed nickel and nickel oxide sinter.
- Indian Stainless Steel Development Association has also called for an increase in the import duties if floor prices are removed to protect the domestic industry.
ALSO SEE:
What will Yashwant Sinha do?
How will personal taxes change?
Fiscal report card
SECTOR ANALYSIS:
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