Refund Of Electricity Duty To Stabilize Steel Exports - ASSOCHAM.

With steel exports falling from 4.43 million tonnes in 2007-08 to 1.88 million tonnes in 2010-11, apex industry body ASSOCHAM urged the government to refund electricity duty on exported goods to offset losses as the duty entitlement passbook scheme is withdrawn from October.

The Associated Chambers of Commerce and Industry of India said that this reimbursement facility will reduce transaction cost for exporters and enable them to be competitive in overseas market.

The scheme can be implemented in the form of refund to exporters on submission of documentary proof of payment of electricity duty and the applications could be on monthly or quarterly basis as is being presently provided for refund of terminal excise duty under the Foreign Trade Policy.

Mr DS Rawat secretary general of ASSOCHAM said that “Refund of electricity duty corresponding to the amount suffered on final goods exported will be WTO compliant scheme and will therefore not fall under any of the actionable subsidies.”

There has been a significant fall in volume of steel exported out of India from 4.43 million tonnes in 2007-08 to 1.88 million tonnes in 2010-11 due to compressed demand in major economies like the United States and the European Union besides trade restrictions imposed by countries like Thailand, Indonesia, the United States and the European Union.

Mr Rawat said that it is therefore essential to ensure that export momentum is not affected in the event of DEPB scheme being discontinued.

Various state governments have provided exemption from electricity duty for 10 to 15 years as part of their industrial policy to encourage new investments. All export oriented units and special economic zones are also exempted.

Source : steelguru.com