With an aim to make steel industry competitive, Union minister Dharmendra Pradhan has said the government will soon come out with a white paper on steel industry. 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. He mentioned that the task will be completed in three-four months with the help of NITI Aayog and other ministries concerned.
Recently, the issue of taxes in the steel sector was a part of a panel discussion on 'India: Roadmap To A $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 $450, whereas in China, where players get benefit of low tax and incentives, it is as low as $350. To provide more relief, Pradhan said the government is bringing changes to the Electricity Act which will address concerns related to power tariffs.
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