Indian government looks to cut tax burden on steel sector
2019-12-25 13:39:19 [Print]
The government will soon come out with a white paper on steel industry that will focus on ways to reduce the tax-related expenditure in the sector and make it competitive, Union minister Dharmendra Pradhan said on Monday.
"We will come out with a white paper in three-four months. The steel ministry, respective ministries and government departments will be part of it," he said.
The white paper will focus on lessening the burden of taxes, cess and other duties on the local steel industry, besides studying the global models.
Recently, the issue of taxes in the steel sector was a part of a panel discussion on 'India: Roadmap To A $5 Trillion Economy'. It was informed that the production cost of steel in India is the highest and one of the major factors contributing to this is the taxes.
Royalty is close to 20% on the input material, whether it is coal or iron ore. Freight cost is higher than what is being paid in other countries. Electricity also adds to the high production cost.
As per industry estimates, in India, average production cost per tonne steel is about $450, whereas in China, where players get benefit of low tax and incentives, it is as low as $350.
To provide more relief, Pradhan said the government is bringing changes to the Electricity Act which will address concerns related to power tariffs.
"We will come out with a white paper in three-four months. The steel ministry, respective ministries and government departments will be part of it," he said.
The white paper will focus on lessening the burden of taxes, cess and other duties on the local steel industry, besides studying the global models.
Recently, the issue of taxes in the steel sector was a part of a panel discussion on 'India: Roadmap To A $5 Trillion Economy'. It was informed that the production cost of steel in India is the highest and one of the major factors contributing to this is the taxes.
Royalty is close to 20% on the input material, whether it is coal or iron ore. Freight cost is higher than what is being paid in other countries. Electricity also adds to the high production cost.
As per industry estimates, in India, average production cost per tonne steel is about $450, whereas in China, where players get benefit of low tax and incentives, it is as low as $350.
To provide more relief, Pradhan said the government is bringing changes to the Electricity Act which will address concerns related to power tariffs.
