After the auction of coal mines, the government is likely to rationalise both customs as well as export duties of major minerals like iron ore, manganese ore and bauxite for raw-material starved end-use industries in the Budget 2015-16 to boost the domestic mining industry.
While domestic miners seek liberalisation of exports and streamlining of concessions to develop mining as a standalone industry, the power sector is hoping that in the 2015-16 Budget, finance minister Arun Jaitley would roll back the 2.5 per cent customs duty on coal imports imposed in the last Budget.
With iron ore production in the country falling from 218 million tonnes (MT) in 2009-10 to 144 MT in 2013-14 and expected to slide further to 100 MT in 2014-15, the government may lower the export duty on low-grade iron ore based on their ferrous content.
As steel producers have resorted to iron ore imports due to depleting availability of the mineral, the customs duty on its imports may also be abolished from the present 2.5 per cent by the finance minister.
Although the government is keen on conservation of major minerals, it is also expected to initiate measures to make the industry viable by the auctioning of mines and slashing duty rates to ease exports. The finance ministry is learnt to be considering a proposal to impose quantitative restrictions on the export of manganese ore to help the domestic aluminium industry. “We request the government to promote mining as a standalone industry.
We have suggested that the 30 per cent ad valorem duty on exports of iron ore should be removed to help exports of inferior grade ore, which is of little use to domestic steel producers,” RK Sharma, secretary general, Federation of Indian Mineral Industries (FIMI) told The Indian Express. Sharma added that FIMI has also suggested abolishing the 20 per cent duty on export of low grade bauxite.
To promote coal-fired power generation, the finance minister may also abolish the 2.5 per cent customs duty on coal imports imposed in the last budget. FM’s other proposals also include exemption of customs duty for upcoming mega power projects, extending GST to the power industry and more clarity on whether raw materials used in the manufacturing of solar cells/modules can be imported duty free.
Ashok Khurana, secretary general of Association of Power Producers (APP) said extending financial sops to upcoming power projects and providing them uninterrupted coal supply will be crucial. CEO, Essar Energy, Sushil Maroo suggested that benefits under the Mega Power Policy would be restored in this Budget.
APP has recommended to the finance ministry to exempt customs duty for all construction material required for UMPPs as well as intermediary/captive goods for integrated power plants awarded through competitive bidding. Central sales tax exemption to power utilities including solar power projects have also been sought by the APP.
The association has further suggested the rationalisation of central sales tax on naphtha and natural gas/RLNG. These fuels presently attract value added tax of around 21 per cent. High taxes on gas and re-gasified liquefied natural gas (RLNG) increases the power generation cost and impacts the industry as a whole and should thus be included in the declared goods category to attract tax of 2 per cent.
Source: Financial Express
- metaljunction »
- Metal News
Metal News & Events
METALJUNCTION PUBLICATIONS
Coal Insights (English) Monthly
Coal Insights is a ready reckoner for anyone associated with coal. This publication is aimed at tracking everything related to coal in India.
India Coal Market Watch(English) Monthly
ICMW is a one-stop source for all news, data and research pertaining to coal demand, consumption, stocks, spot- and long-term prices with respect to the Indian Market.
India Steel Market Watch (English) Monthly
ISMW is a brand new high-end steel market report, covering all aspects of the steel industry in India.
Steel Insights(English) Monthly
Steel Insights delves into various facets of the domestic and global steel industry such as market fundamentals, raw material price trends, price forecasts etc.