Duty refund, incentives for steel and cement
The government has announced export benefits for the distressed steel and cement industries by way of duty refund and incentives for shipments to third-world countries. Exporters of cement and several steel items will again be entitled for tax refunds through duty entitlement passbook scheme (DEPB).
The two sectors have been included in the focus market scheme of the government, enabling these troubled sectors to boost their exports to the third world, according to a government notification. The crisis-ridden construction and real estate sectors also got some respite, with the government removing curbs on import of high value marble tiles, except those not mined and processed in neighbouring Nepal.
Though India’s total steel exports are not impressive at around five million tonnes, the industry feels restoration of DEPB benefits will open up avenues for overseas shipments when the market improves. In June this year, the government had withdrawn DEPB benefits for steel and cement when prices of these two commodities increased.
The focus market incentives will come in the form of 2.5% duty credits, which can be used for customs payments by the industry.
Export incentives are, however, limited to shipments to Latin America, Africa, and eastern Europe. The steel industry is plagued by high inventories in the face of slackening global demand and a sharp correction in prices.
Several steel firms have resorted to production cuts by over 20 per cent in the phase of slowdown in demand, both in domestic and global market.