Steel body seeks steady import duty

The Steel Furnace Association of India (SFAI) has urged the government to leave the 15 per cent Customs duty on imports untouched for the next two to three years.

It also wants the government to reduce Excise duty to eight per cent from the current 16 per cent.

Seeking stability in Customs duty on primary and semi-finished forms,

SFAI appealed that though there might not be an immediate surge in imports owing to the high cost of imported stainless steel and alloy steel, any reduction in customs duty would leave the domestic industry vulnerable, in the event of a fall in international prices.

SFAI has also suggested surveillance of iron and steel imports, and making mandatory for importers to submit details of products they want to import.

At present, only eight select items come under surveillance in India. Besides, the data are available only for five weeks after the imports, thus making it difficult for the government and the industry to take timely action against any sharp increase in imports.

Representing the interests of the mini-steel industry, having members who produce steel ranging from construction steel and stainless steel to alloy and special steel, SFAI has demanded a total ban on import of seconds and defective steel. Such imports, it felt, would have a negative impact on the quality of output made from steel.

As a first step in this direction, SFAI has said that the countervailing duty on such imports must be made "non-Modvattable", denying the importer the advantage of taking credit on duty paid.

In its representation to the government, SFAI has said that while the industry is not given any relief since the start of the reforms process, the recent Budget has increased the excise duty from 12 per cent to 16 per cent.

"In some sectors like construction, the Cenvat credit is not available as the chain does not even take off. The product is sold directly to the consumer, who has to bear the full brunt of 16 per cent," said a release from SFAI.

It felt that a relief in excise duty would not adversely affect the revenues in the long-run or even in the short-run, as a higher production is projected.