After fortifying protection for domestic steel companies via anti-dumping duties, minium import prices and safeguard levies, the government is now considering reducing the basic customs duty (BCD) on a number of specified flat products of alloy and non-alloy steel. The idea is to give relief to end-use segments struggling to remain afloat in the wake of the cost escalation.
Following repeated representations from the industry, the government had raised BCD on various steel products including flat products of alloy and non-alloy steel twice last year — first in June and then again in August — by 2.5 percentage points each. So the BCD on these products currently stands between 10-12.5%. Although the quantum of duty cut being considered is not immediately known, sources said that duties on the products might come down by 2.5 percentage points.
Sources in the revenue department of the finance ministry said that, at that point of time, it was categorically communicated to the steel ministry that the hike in the BCD rates should be considered as temporary and once safeguard or antidumping measures are imposed, a revision would be necessitated for the benefit of the downstream industries.
Meanwhile, the government has imposed antidumping duties and safeguard duties on specified flat products of alloy and non-alloy steels in August and September, respectively, in order to protect the industry from material injury caused on account of cheap imports.
While a provisional antidumping duty on hot-rolled flat products of alloy or non-alloy steels was imposed in the range of $474 per tonne and $ 557 per tonne, respectively, from six countries — Japan, Korea, Russia, Brazil, Japan and Indonesia — a 10% provisional safeguard duty was also imposed on HR plates. On the recommendations of the DG (Safeguards), the government is also examining imposition of safeguard duty on certain flat products of alloy and non-alloy steel at prescribed rates for three years.
If BCD rates are brought down, it would help downstream industries such as pipe makers to a large extent.
Pipe makers have even written to the Prime Minister’s Office requesting to double BCD on finished pipe products to 20% from 10% now. They also urged the PMO to do away with the prevailing inverted duty structure where the import duty on finished goods is lower than the raw materials such as plates and coils. This has made domestic industry uncompetitive.
Source: financialexpress.com