Domestic steel industry is seeking reduction in basic customs duty on key raw materials like anthracite coal, metallurgical coke, coking coal, and graphite electrode in the upcoming Budget. The non-availability of these items in good quality and quantity hinders the growth of the steel industry, industry body Confederation of Indian Industry (CII) said in its Budget recommendations for the sector.
The basic customs import duty on anthracite coal is 2.5%. The availability of the said item in good quality is declining in the country and the steel industry may have to become totally dependent on import of these on a regular basis, the body said while suggesting a reduction in import duty to nil. For metallurgical coke, CII has suggested cutting the import duty to 2.5%, from 5% at present.
Low ash metallurgical coke, HS Code 2704, is a key raw material in steel making accounting for almost 46% of the total raw material cost. Reduction in duty will help the domestic steel industry to be cost-competitive. In its recommendations, CII has also suggested removing the import duty on coking coal. The duty on import of coking coal at present is 2.5%.
The industry body said the domestic supply of coking coal is not sufficient. Hence, to meet the domestic requirement, it has to be imported. Therefore, the duty should be reduced to nil. The reduction will also help to rationalise the duty structure on met Coke, which is the end product of coking coal.
CII further said graphite electrode is a major consumable in steel making. The Indian steel producers are bound to import graphite electrodes as almost 60% of domestic production of graphite electrode is exported, creating a shortage in the domestic market. “High duty merely increases the cost burden,” it said, adding that it should be reduced to nil from 7.5% at present.
