To protect domestic industry from cheaper foreign shipments, steel major Steel Authority of India (SAIL) wants a 14% countervailing duty imposed on imported TMT bars and structurals used in the construction and infrastructure sector.
Countervailing duty is equivalent to the excise paid by domestic manufacturers. Its imposition is expected to benefit leading steel producers like SAIL, RINL, Tata Steel, JSW and Ispat by making the imports of the commodity dearer.
Whereas the domestic steel makers pay an excise duty of 14% on TMT bars and structurals they manufacture, the importers procure the same from overseas by paying a customs duty of five per cent, which makes their products cheaper.
In addition to higher import tariff on overseas shipments of steel products, the domestic industry has been demanding a countervailing duty to make imported items price-competitive and ensure a level playing field.
The government had earlier scrapped the countervailing duty on TMT and structurals to tame the sky-rocketing domestic prices. According to industry experts the absence of countervailing duty is proving disadvantageous to the domestic industry against cheap imports on which only a fixed customs duty is levied.
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