October 12, 2008

India imposes export tax on steel and cuts import duty

Mr P Chidambaram Indian finance minister has announced a series of measures to cool down the surge in steel prices in India by improving availability.

While announcing a slew of duty cuts on raw and finished material, he said that currently, steel prices contribute over 21% in the inflation rate and with a view to controlling prices exports would be disincentivised with levy of export duty.

1. Imposition of export tax
HR – 15%
CR and tubes – 10%
HDG - 5%
(Details for other steel products like semis, rebar, plates etc is not available as yet)

2. Reduction of custom duty to zero
Iron and steel
Zinc
Metallurgical coke
Ferroalloys
(Full details awaited)

3. Abolishing Countervailing duty on re bar imports

Mr Chidambaram said that changes in import duty would come into effect today and changes in export duty would come into effect from the day the Finance Bill is passed by Parliament.

These announcements have set to rest all speculations on impending fiscal measures being mooted by the government to contain rise in steel prices.