The much awaited Indian Budget 2017-18 was finally presented in the parliament on 1st February 2017. The Steel Industry expectations was hardly met in the union budget especially it has largely overlooked the key demand to reduce customs duty on coking coal to nil from present level of 2.5 % and scrapping of clean energy cess as these measures hinder competitiveness of domestic steel firms.
The Finance Minister Arun Jaitely introduced the Budget by saying “We have moved from a discretionary based administration to a policy & system based administration. Massive war on black money has been launched”.
Finance Minister in his Union Budget announced a record allocation of Rs 3.96 lakh crore to infrastructure sector.
Highlights of the Budget for Steel Industry
1. Export duty @ 15% imposed on other aluminium ores, including laterite which was zero earlier
2. Basic Customs duty on Nickel has been waived off which was earlier at 2.5%
3. Basic Customs Duty on MgO coated cold rolled steel coils [7225 19 90] for use in the manufacture of CRGO steel, subject to actual user condition reduced from 10% to 5%
4. Basic Customs Duty on Hot Rolled Coils (7208) for use in the manufacture of welded tubes and pipes falling under heading 7305 or 7306, subject to actual user condition reduced from 12.5% to 10%
5. The decision to cut down customs duty to 2.5 % from 5 % on LNG (liquefied natural gas) will boost domestic steel companies which rely on imports to run gas based steel plants.
6. Railways will implement end to end integrated transport solutions for select commodities through partnership with 18 logistics players, who would provide both front and back end connectivity.
7. To improve the Operating Ratio of the Railways the tariffs of Railways would be fixed, taking into consideration costs, quality of service, social obligations and competition from other forms of transport.
8. Budget allocation for highways from ‘ 57,976 crores in Budget Estimate(BE) 2016-17 to ` 64,900 crores in 2017-18. 2,000 kms of coastal connectivity roads have been identified for construction and development.
9. An effective multi modal logistics and transport sector will make our economy more competitive.
10. For transportation sector as a whole, including rail, roads, shipping, the budget have provided ` 2,41,387 crores in 2017-18. This magnitude of investment will spur a huge amount of economic activity across the country and create more job opportunities.
11. A new and restructured Central scheme, namely, Trade Infrastructure for Export Scheme (TIES) will be launched in 2017-18.
Basic Customs Duty on Steel Goods
| Item | CH No. | Customs Duty for FY18 |
MIP in USD/MT |
Provisional Anti Dumping Duty |
Provisional Safeguard Duty |
| Pig iron | 72.01 | 5.00% | – | – | – |
| Semis | 72.07 | 10.00% | MIP Removed | – | – |
| Bars & Rods | 72.13 | 10.00% | MIP was imposed at USD 449-451/MT which no longer exsts |
Provisional Anti Dumping Duty imposed |
– |
| Structurals | 72.16 | 10.00% | – | – | |
| HR Sheets/Plates(Non Alloy) | 72.11 | 12.50% | 500 | – | |
| HR Coils (Non Alloy) | 72.08 | 12.50% | MIP was imposed HR-USD 445/MT, Plates USD 500/MT which does not exists now |
Provisional Anti Dumping Duty Imposed |
– |
| CR Coils/Sheets (Non Alloy) | 72.09 | 12.50% | MIP was imposed at USD 560/MT which no longer exists. |
Provisional Anti Dumping Duty imposed |
– |
| HR/CR Alloy Steel(Flat rolled) other than items of Headings No. 72253090, 72254019, 722550 and 72259900 |
– | 10.00% | – | – | |
| Flat Rolled Alloy products of Alloy products of heading 72253090,72254019, 7225550 and 72259900 |
7.50% | 445-752 | – | ||
| GP/GC, PPGI, Tinplates W/W and TFS seconds | 72.10, 72.12 | 12.50% | MIP imposed on HDG at USD 643/MT and on PPGI at USD 752/MT which will expire on 04 Feb’17 |
Provisional anti-dumping duty imposed for six months |
– |
| Stainless steel HR coils for coin blanks | 72.19 | 7.50% | – | – | – |
| Melting scrap (iron, steel & stainless steel) | 72.04 | 2.50% | – | – | – |
| Re-rollable scrap | 72.07 | 10.00% | – | – | – |
| Iron ore | 26.01 | 2.50% | – | – | – |
| Iron Pellets | – | 2.50% | – | – | – |
| Coking coal of ash content below 12% | 27.01 | 2.50% | – | – | – |
| Coking coal of ash content below 12% | – | 2.50% | – | – | – |
| Steam Coal | 27.01 | 2.50% | – | – | – |
| Metcoke | 27.04 | 5.00% | – | Anti Dumping Duty imposed on imports of Low Ash Metallurgical coke originating from China |
|
| Flat Rolled Products of Other Alloy Steel of a Width 600 mm or more |
7225 | 12.50% | MIP was imposed at HR -USD 445/MT, Plates – USD 500/MT, HDG – USD 643, PPGI-USD 752/MT |
Provisional anti dumping imposed on most of the products. Rest are under investigation. MIP exists only on 72259100, 72259200 |
Safeguard duty imposed on HR plates & sheets imports till 2019 at the rate of 10% for 1st year, 8% for 2nd year and 6% for 3rd year |
| Other Alloy Steel in Ingot or Other Primary Form, Semi Finished Products of Alloy Steel |
7224 | 12.50% | MIP was imposed Ingots/Billets – USD 362, Blooms – USD 352, Slabs USD 341 which was later removed |
– | – |
| Other Bars & Rods of Iron or Non Alloy Steel, Not Further Worked than Forged, Hot Rolled, Hot Drawn or Hot Extruded, But Including those Twisted after Rolling |
7214 | 12.50% | MIP was imposed at USD 449-451/MT which no longer exsts | – | – |
| Particulars | Export Duty |
| High grade iron ore (both lump & fines) | 30% |
| Low grade iron ore (both lump & fines) | 0% |
| Iron ore pellets | 0% |
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