Refractory units feel tax pinch

The refractories industry is disappointed that the budget has not corrected the customs duty anomalies for the industry.

The Indian Refractory Makers Association (IRMA) expressed concern that the Union budget while maintaining peak rate of 20 per cent in general, had brought down on import of finished refractories to 15 per cent simultaneously with a reduction of duty on some of the raw materials to 15 per cent.

Prior to the budget, the customs duty on import of finished refractories and many of the raw materials were at the peak rate of 20 per cent.

P Das Gupta, executive director (IRMA) stated that contrary to the accepted policy that the duty on raw materials should be less than the duty on intermediate or finished products, the domestic refractories producers continued to be at a distinct disadvantage vis-a-vis imported products.

"It therefore faces a virtual negative protection" he said.

The Association considers that unless the customs duty on import of finished refractories coming under tariff item no 3816, 6902, and 6903 is restored to 20 per cent, or the duty on the raw materials further reduced to 10 per cent, there are serious apprehensions that the domestic refractory industry will receive a major setback relative to imports of refractories from overseas.

Biswadip Gupta, managing director, Vesuvius however said that this might help the refractory industry. Refractory raw material from China was being imported at 20-25 per cent higher prices, this would mitigate a part of that cost.

But, Gupta pointed out, the main market for the refractory industry was steel, which was badly hit by the budget. "This hit came just at a time when the industry was trying to come out of recession."