Industry seeks level-playing field with primary metal producers who enjoy duty-free import of finished products under FTAs with various countries.
The
metal recycling industry has urged the government pare the import
duty on metallic scrap, its sole raw material, to nil from the
existing 2.5-5 per cent.
It
also wants a reduction in goods
and services tax (GST) to five per cent from the existing 18 per
cent, in order to provide a level playing field with domestic primary
metal producers who enjoy duty-free import of finished products under
the Free Trade Agreement (FTA) with various countries.
Keep
Reading : Budget
2019
In
a pre-Budget submission to Union Finance Minister Nirmala Sitharaman,
the apex industry body, Metal Recycling Association of India (MRAI)
president Sanjay Mehta, said, "Since India doesn't generate
enough metal scrap, the demand for the same has to be met through
import. Most countries in the world Sri Lanka, Nepal, Thailand,
Malaysia, Indonesia, Japan etc. have reduced import duty on imported
scrap to nil. India remains the only country with an import levy of
2.5-5 per cent on metallic scrap despite the fact that its import
conserves domestic natural resources, saves energy and also generates
employment."
While
import of iron and steel, copper and aluminium scrap currently
attracts import duty of 2.5 per cent, brass and zinc scrap suffers
five per cent of import tax in India.
At
the same time, the government has encouraged primary producers by
exempting copper concentrate, the raw material, from import duty.
Apart from that, finished products of these ferrous and non-ferrous
metals are also imported duty-free under the free trade agreements
(FTAs) signed with ASEAN and other countries to boost regional and
bilateral co-operation.
India
being deficient in copper concentrate but rich in bauxite for
aluminium production, the government has encouraged primary producers
in both metal segments at the cost of secondary producers, who
contribute nearly half of India's overall non-ferrous metal demand.
"The
government has levied 7.5 per cent import duty on primary aluminium
to protect the interest of domestic producers while levying 2.5 per
cent duty on aluminium scrap to prevent growth in secondary metal
segment. Since primary aluminium can't replace aluminium alloy used
in auto sector, import duty on aluminium scrap has proved the biggest
impediment to meet rising demand from this sector," said Mehta.
Amar
Singh, Secretary, MRAI, said, "The Regional Comprehensive
Economic Partnership (RCEP), a proposed FTA between 10 member states
of ASEAN and the six Asia-Pacific nations pose bigger threats.
Particularly, for copper, in spite of having excess manufacturing
capacity in India, our imports now constitute 35 per cent."
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