India’s Ministry of Steel has submitted a request to its counterpart Ministry of Finance seeking imposition of a border adjustment tax (BAT) on imported steel to ensure level playing field for domestic producers, a government official said.
The official said that a BAT can be imposed on imported steel in addition to customs duties applicable on imports of grades of steel products that are available in the local market.
The official said that the demand for imposition of BAT was in response to domestic steel industry which has lodged complaints that multiple local levies like electricity duties, duties of fuel, clean energy cess, royalties paid on minerals consumed, get accumulated into cost of production of domestic steel price which could be offset through imposition of BAT on imported steel at about 12 percent, which do not get burdened by similar levies in countries of origin of such products.
BAT would offset comparative cost advantages of steel imported from originating countries with Free Trade Agreements (FTAs) with India, the official added.
He said that BAT was expected to be WTO compliant as several countries have resorted to the measure to protect domestic industries.