Steel min to seek removal of coking coal cess

The steel ministry is seeking removal of clean environment cess and import duty on coking coal as domestic manufacturers are unable to pass on the price increase to buyers because of depressed markets, a senior government official said.

These proposals are part of the wish list to be sent to the finance ministry for Union Budget 2017-18 (Apr-Mar). The domestic steel industry is strongly opposed to the 2.5 per cent import duty on key raw materials and clean environment cess on coking coal as the recent surge in international prices of the fossil fuel has only added to the woes of the steelmakers, the official told Cogencis.

The cess on coking coal was doubled to Rs 400 per tonne in the Union Budget for 2016-17. The steel ministry claims that coking coal, a major raw material in the steel-making process, does not pose any danger to the environment, unlike thermal coal which is used by power plants. "Power producers can switch to alternative sources--solar and wind. But steelmakers cannot do that," the official said, adding that the matter is also being taken up by the coal ministry. The ministry is also likely to seek abolition of import duty on raw materials such as coking coal and scrap. Currently, coking coal attracts 2.5 per cent import duty, and steel scrap has 5 per cent duty. Major steelmakers such as Steel Authority of India Ltd and Tata Steel Ltd meet 80 per cent of their coking coal requirements through imports.

Coking coal prices have risen sharply in the international market in the last three months and have doubled to nearly $200 per tonne. With the advancement of the Union Budget by a month to Febuary 1, the steel ministry is set to send its Budget wishlist in November.