Secondary steel producers in Chandigarh have
sought from the Centre 'deemed credit' facility on scrap sourced locally from
non-excisable units, saying it will curb “large scale duty evasion”
and boost government revenue.
“We have urged the Centre to allow induction furnace owners to claim deemed
credit on scrap bought domestically from units which do not fall under the
purview of Central Excise,” said All India Induction Furnaces
Association (AIIFA) President, K K Garg.
“If deemed credit facility is allowed, it will plug the leakage of revenue
and ensure prevention of malpractice, prevalent in the trade and
industry,” he said.
Various industries, outside the purview of central excise, like bicycle, sewing
machines, SSI engineering and units, located in tax free zones, produce scrap
out of steel on which excise duty is already paid.
Indigenous steel-melting scrap sourced from non-excisable units constitutes 40
per cent of total input requirement for country's induction furnace owners.
“The problem arises as scrap sellers could not produce excise documents
while selling to us. As a result of which induction melting furnace units are
not able to get any duty credit on steel products made out of this type of
scarp,” he said.
As the industry procures scrap without proper bills, it sells steel ingots made
out of this scrap while adopting “illegal means”, including not
paying excise duty on these goods by hoodwinking central excise authorities,
according to industry experts.
“Once we are allowed deemed credit on scrap, excise revenue of the Centre
will increase and malpractice prevalent in trade will also be curbed,” he
said.
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