Special Additional Duty (SAD) in Metal scrap of Iron & Steel, Copper, Brass and Aluminum reduced from 4% to 2%.
Modi Goverment hears the cry of Scrap importers and reduced the partial duty burden to certain extent. Budget brought about an ease of 2% on SAD for Scrap importers in India.
India’s majority of Crude steel comes from Secondary manufacturers, who are highly dependent on Scrap & Sponge for Steel production.Levying a duty of 4% on this crucial raw-material i.e. Ferrous scrap had blocked the working capital of these manufacturers, hurting the value addition by making it costlier.
What is SAD?
SAD is refundable tax levied on Scrap importers. It was introduced on 8 May’13 with 4% duty. It was imposed on Scrap imports to safeguard the interest of Sponge iron manufacturers in India. After introduction of SAD, imports of Ferrous scrap fell by around 42% in FY14 (i.e 7 MnT in FY13 to 4.1 MnT in FY14).
Though the budget did not introduced any change in custom duty which is still at 2.5%, partial exemption in SAD may provide relief to importers. This may also lead to increase in Scrap imports in FY16. India during Jan’15 of this financial year has imported around 4.3 MnT of scrap.
* till Jan’15
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