5% export duty on iron ore pellets; excise hiked on gutkha

NEW DELHI: The government today imposed a five per cent export duty on iron pellets, a critical raw material for the steel industry, and raised excise duty on pan masala, gutkha and chewing tobacco.

"Considering the domestic requirement of iron ore pellets, the Government has decided to impose an export duty of 5 per cent on iron ore pellets," the Finance Ministry said.

The Central Board of Excise and Customs ( CBEC) has issued a notification in this regard.

Iron ore fines and lumps already attract an export duty of 30 per cent.

Iron ore pellets were exempted from the duty as the exports were negligible in 2012-13.

"However, in April-November 2013, exports of iron ore pellets have risen sharply, causing an apprehension about shortage of iron ore in the country," the Ministry added.

Meanwhile, the government has also increased excise duty on pan masala and tobacco products including gutka, chewing tobacco, unmanufactured tobacco and filter khaini packed in pouches with the aid of packaging machines under the compounded levy scheme.

The new duty rates will depend on the retail price and average speed of pouch packing machines.

"Pan masala, pan masala containing tobacco (gutkha), chewing tobacco, unmanufactured tobacco and filter khaini packed in pouches with the aid of packaging machines are leviable to excise duty on the basis of the capacity of production which is determined based on the average speed of packing machines of pouches of various retail sale prices," the Ministry added.

Giving an illustration, it said the new rate of duty per packing machine per month for a pan masala pouch (having retail sale price of Rs 8) will Rs 1.08 crore.

Similarly, the duty per packing machine per month for a chewing tobacco pouch (without lime tube and having retail sale price of Rs 55) will be Rs 3.77 crore.

The duty rate was last revised in the Budget 2012-13.