New Delhi: Industry body Assocham on Thursday suggested exempting iron ore import from basic custom duty and countervailing duty as in the case of coal in a bid to revive steel industry.

In a note submitted to the government, the chamber said, "Import of Finished Steel Products from FTA (Free Trade Agreement) countries of South Korea, Japan and ASEAN, land at a high concessional duty rates into India as compared to normal duty rates from other countries."

It added that from January 1, 2013, these concessions would further increase resulting into many steel products turning cheaper and landing at 2.5 per cent import duty while some others would be imported with as low a duty rate as  one per cent from South Korea.

Arguing that this "inverted" duty rate between finished steel and Iron ore is therefore denying an opportunity to steel sector for value addition, the chamber said it will have a cascading impact on the economy putting at risk not only the huge funds invested by FIs and Banks but also employment.

The chamber further said, the domestic steel production in the country is going through a rough phase due to non-availability of iron ore.

In view of Supreme Court's decision to impose a production cap in the state of Karnataka and suspension of all mining activities in the state of Goa and additional regulatory measures, the iron ore production is bound to remain at stagnant levels for obvious reasons, it said.

Citing examples as to how players are resorting to acquisition of iron ore mining assets abroad which is throwing them to another basket of risk, it demanded that the government should exempt BCD and CVD on iron ore on the pattern of coal.


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