The proposed measures include bringing steel back under the Essential Commodities Act, 1955, suspension of futures trading in iron and steel on commodity exchanges and reclassifying the railway freight rate for iron ore.
Other steps that have not been announced yet include ensuring uninterrupted supply of electricity and railway rakes to small and medium steel producers to improve their capacity utilisation and productivity. The proposal to reduce excise duty from 14 per cent to 8 per cent on various forms of iron as well as semi-finished products, bars, rods, angles and wires has also not been announced.
Another proposal was to improve availability of hot rolled (HR) coils by permitting its imports under the advanced licensing scheme (ALS) against the export of cold rolled (CR) coils, galvanized and coated products, tubes, and pipes.
Since working out the imports arrangements under the scheme would take some time, the proposal was agreed upon but would come into effect from July 1. In the meantime, export of these products was to be taxed, a measure announced in Parliament on April 29 by Finance Minister P Chidambaram.
Since the tax on exports has been announced but not notified, the steel ministry is of the view that it is necessary to exempt from tax the export of CR coils, galvanized and coated products as well as tubes and pipes that are exported against imports of HR coils under the ALS.
In the absence of such an exemption, the ministry feels manufacturers will not find it economical to import HR coils under ALS, add value and export the value-added products after paying the export taxes.
Accordingly, the steel ministry has said the Department of Revenue should notify the export tax exemption, while issuing the notification for export taxes which will come into effect once the Finance Bill, 2008, receives the president's assent.