White paper to reduce tax burden on steel sector in the offing
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. The task will be completed in three-four months with the help of NITI Aayog and other ministries concerned, he said at an industry event here.
The steel minister said he will on behalf of his ministry assign a task to NITI Aayog and ask the think tank to discuss ways with all the government departments, especially the finance department, to make steel industry competitive.
"We (government) 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 USD 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 per cent 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 of per tonne steel is about USD 450, whereas in China, where players get benefit of low tax and incentives, it is as low as USD 350. To provide more relief, Pradhan said the government is bringing changes to the Electricity Act which will address concerns related to power tariffs.
He also said the industry need not worry about raw materials as a number of mines will be auctioned post March 2020 and added that interested parties are free to participate in the bidding process.
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