More duty on iron ore export

New Delhi, July 17: The high-powered Committee of Secretaries (CoS) chaired by cabinet secretary KM Chandrasekhar that met recently has preferred an increase in export duty on pig iron, sponge iron and semi-finished steel products to 20 per cent besides considering a minimum export price (MEP) for these items instead of banning their overseas sale. It has also favoured a hike in export duty on iron ore to 20 per cent from 15 per cent now.

After deliberating extensively on steel ministry’s proposal that recommended a ban on exports of pig iron, sponge iron and semis, the CoS felt a ban would not be sustainable, and it would give unintended wrong signals to the trade. A ban may also render many jobless as such units may be forced to close down.

The CoS has asked the revenue department to coordinate with the departments of commerce, industry, mines and steel and work out a package for steel products. “No proposal for banning export of flat products was considered by the CoS,” highly-placed sources told The Indian Express.

In the meeting, the Steel Ministry said that pig iron, sponge iron and semis were essential inputs for making steel. While total exports of steel during April-June this year dipped 31 per cent to 0.9 million tonne, it pointed out that exports of semis had surged and that of sponge iron, which was hardly sold overseas earlier, had also begun. Noting that exports of these products will be viable even at higher rates of duty, it recommended a ban on export of these products to increase their domestic availability.

On the contentious issue of iron ore exports, the steel ministry said that except for state-owned National Mineral Development Corporation, other producers increased the price of lumps by Rs 500 to Rs 1,000 a tonne after the duty on exports were imposed. In view of high demand from steel producers and sponge iron producers for good quality ore (lumps), there was a need to further disincentivise exports by banning them and enhancing availability by 7.4 million tonnes, albeit it would entail a revenue loss of about Rs 830 crore, it said.

The Ministry, however, proposed another option of hiking the export duty to 20 per cent from 15 per cent that will help the Government rake in additional revenues of Rs 2,583 crore, the ministry said, adding the mines ministry should be taken on board while deciding on the issue.

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