After intense battle of nerves with the steelmakers, the government on Tuesday imposed up to 15 per cent export duty on various steel products to contain rise of prices of the alloy, a move that will hit industry hard.
Replying to the discussion on the Finance Bill 2008-09, Finance Minister P Chidambaram announced imposition of 15 per cent export duty on semi-finished steel products and 5 per cent duty on galvanised sheets to disincentivise exports to contain the domestic demand-supply mismatch and consequent rise in steel prices.
He also announced reducing to zero the customs duty on basic steel-making inputs like metcoke, ferro-alloys and zinc, while abolishing the Countervailing Duty on construction products like TMT bars.
These announcements by the Finance Minister has set to rest all speculations on impending fiscal measures being mooted by the government to contain rise in steel prices which have contributed 21.3 per cent to the current inflation in the country.
These measures were recently discussed at length in the inter-ministerial consultations where Steel Minister Ram Vilas Paswan, Commerce and Industry Minister Kamal Nath and Mines Minister Sis Ram Ola apart from Chidambaram deliberated on the proposals of the Steel Ministry to contain spiralling steel prices.
The Finance Minister had insisted on a 'revenue neutral model' to offset the losses of about Rs 5,000 crore that will be caused by these fiscal measures.