Steel giant Steel Authority of India (SAIL) has sought early imposition of 14 per cent countervailing duty on imported TMT bars and structurals, which are widely used in construction sector, to protect domestic industry from cheaper shipments of the commodity from abroad.
"World steel prices were going through the roof when the countervailing duty was removed. But such circumstances no more exist and so the duty should be imposed," SAIL Chairman Sushil Kumar Roongta told PTI in an interview.
Countervailing duty is equivalent to the excise paid by domestic manufacturers. Its imposition is expected to benefit leading steel producers like SAIL, RINL, Tata Steel, JSW and Ispat by making the imports of the commodity dearer.
Whereas the domestic steel makers pay an excise duty of 14 per cent on TMT bars and structurals they manufacture, the importers procure the same from overseas by paying a customs duty of five per cent, which makes their products cheaper.
In addition to higher import tariff on overseas shipments of steel products, the domestic industry has been demanding a countervailing duty to make imported items price-competitive.
"There is no justification for the Indian steel industry paying 14 per cent excise duty when only a minimal import tax is levied on steel items being dumped in India," Roongta said.
The government had scrapped the countervailing duty on TMT and structurals earlier this year to tame the sky-rocketing domestic prices. The tax is in place on other steel items.
Experts said the absence of countervailing duty is proving disadvantageous to the domestic industry against cheap imports on which only a fixed customs duty is levied.
At the same time, its imposition may come as a setback for infrastructure companies that are buying cheaper alternatives from overseas currently, he added.
