Stainless steel exporters to get back duty benefits

The government is likely to restore the duty entitlement pass book scheme (DEPB) benefits to stainless steel exporters after the coming general elections.

Senior government officials told Business Standard that the move follows representations from the stainless steel industry.

"We are planning to operationalise the DEPB benefits after the elections as the export of stainless steel was not significant enough to affect domestic prices," an official said.

The DEPB benefits were frozen from March 27 this year to discourage steel exports and contain spiralling steel prices in the Indian market. Various industry associations representing stainless steel, alloy and ferro alloy makers had made representations to the government seeking restoration of the duty neutralisation scheme.

Sources said any move to restore the DEPB benefit before the elections was likely to require the Election Commission's review. "In order to avoid any controversy we are looking at restoring the benefits after the elections," an official said.

The steel ministry had forwarded the various representations to the commerce ministry. The sources added that any move to restore the duty benefit would have financial implications as the government had reduced the excise duty on steel by half to 8 per cent and provided other Custom duty benefits.

The restoration of the DEPB benefits is not unexpected as global steel prices have shown signs of declining due to a sharp fall in consumption by China.

Prices of flat rolled products have dipped $50-60 a tonne, while that of scrap products are lower by $30 a tonne. Prices of raw materials like metcoke has also witnessed a decline, while freight costs have come down.

In March, five major steel makers had cut prices by Rs 2,000 per tonne.