ISA demands reduction in excise taxes for steel
The Indian Steel Alliance (ISA) demanded that the government reduce the excise tax on steel from the current 16 percent to 8 percent in order to spark investor confidence in the steel sector.
ISA chief Moosa Raza indicated that a reduction in excise taxes for steel is necessary, especially when the government target of producing more than 100 million tons of steel by 2020 is taken into account. In the light of current capacity expansion plans carried by the local investors, and the signed memoranda of understanding between the local governments and the foreign investors, a reduction in the excise tax will increase investor confidence in the Indian steel sector.
Mr. Raza also said, "The Indian steel industry is unfortunately among the least protected industries in the world and is exposed to cheaper imports from the competing nations. Till September, steel exports from countries like
Russia,
Germany and
Egypt had increased by nearly 50 per cent, which is why there is an express need for rationalizing import duties as is done in the developed nations.”
A lower excise tax and an adjustment in the current import duties may enable the government to control steel flow in Indian market better.
Moreover, the ISA chief pointed out the importance of allocation of certain raw materials to domestic players. According to the ISA, the government should ensure availability of raw materials, such as
coking coal and
iron ore, to the industry.