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Iron ore pellets to attract 5% export duty

28 Jan 2014 Evaluate

In a move to overcome the shortage of iron ore pellets in the country, the government has imposed a five percent export duty on iron pellets, a critical raw material for the steel industry. Iron ore pellets made from iron ore fines were exempted from the duty as the exports were negligible in 2012-13. However, during April-November 2013, iron ore pellets’ exports increased sharply, causing the shortage of iron ore pellets for domestic requirements. Iron ore fines and lumps already attract an export duty of 30 per cent.

Export duty on pellets had been removed as the steel ministry asked the finance ministry to revoke duty on pellets as it goes against the principle of promoting value addition within the country. But recently Indian steel producers sought an export duty of 30% on overseas shipments of iron-ore pellets, on par with the duties on exports of iron-ore fines and lumps, citing that the current nil rate of export duty on iron-ore pellets had led to a sharp rise in moving the value added raw material overseas. Over the last few years, domestic iron ore production has came under pressure due to the prevailing regulatory concerns such as mining ban in Goa and Karnataka that has impacted the performance of country’s mining sector.

Tin related development, the Government has also increased the excise duty on pan masala and tobacco products packed in pouches with the aid of packaging machines under the compounded levy scheme. These products including gutka, chewing tobacco, unmanufactured tobacco and filter khaini and attract excise duty on the basis of the production capacity , which is determined by the speed of the machines used to pack pouches.

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