Government to slash cess on TMT bars
In what may turn out to be a big bonanza for the construction sector, the government on Tuesday decided to slash 14% countervailing duty (CVD) on TMT bars.
By TNN |
NEW DELHI: In what may turn out to be a big bonanza for the construction sector, the government on Tuesday decided to slash 14% countervailing duty (CVD) on TMT bars. The move is expected to reduce the price of imported bars by over Rs 5,500 per tonne making it cheaper then the domestically produced product. The move may force domestic steel companies to revise the prices downwards and match up with imported prices.
The decision to slash CVD on construction products like TMT bars was announced by finance minister P Chidambaram while replying to the discussion on the Finance Bill 2008-09 in Parliament. The decision is part of a series of fiscal measures including imposition of 15% export duty on semi-finished steel products, 5% on galvanised sheets and abolition of 5% import duty on an array of inputs and steel products. These are aimed at controlling the rising price of steel that contributes to about 21.3% of the current inflation. The export duty could be increased upto 20% as government has taken Lok Sabha���s approval for the same.
The decision to abolish CVD on TMT bars is expected reduce the landed price of the product to about Rs 33,000 a tonne from the present level of Rs 39,000 a tonne. With domestic price (inclusive of excise duty) hovering around Rs 41,000 a tonne, the government measure is expected to induce domestic companies to also slash prices.
Earlier, at a meeting with the steel ministry, steel companies had agreed to reduce the price of long products (including TMT bars) by Rs 2000 a tonne. This didn���t seem to have desired impact on the retail prices forcing the government to slash CVD, a move that would result in a revenue loss of about Rs 140 crore in 2008-09. The decision has been welcomed by the construction sector which feels the move would be leg up at a time when the industry is witnessing a slowdown in demand a price correction.
The decision to slash CVD on construction products like TMT bars was announced by finance minister P Chidambaram while replying to the discussion on the Finance Bill 2008-09 in Parliament. The decision is part of a series of fiscal measures including imposition of 15% export duty on semi-finished steel products, 5% on galvanised sheets and abolition of 5% import duty on an array of inputs and steel products. These are aimed at controlling the rising price of steel that contributes to about 21.3% of the current inflation. The export duty could be increased upto 20% as government has taken Lok Sabha���s approval for the same.
The decision to abolish CVD on TMT bars is expected reduce the landed price of the product to about Rs 33,000 a tonne from the present level of Rs 39,000 a tonne. With domestic price (inclusive of excise duty) hovering around Rs 41,000 a tonne, the government measure is expected to induce domestic companies to also slash prices.
Earlier, at a meeting with the steel ministry, steel companies had agreed to reduce the price of long products (including TMT bars) by Rs 2000 a tonne. This didn���t seem to have desired impact on the retail prices forcing the government to slash CVD, a move that would result in a revenue loss of about Rs 140 crore in 2008-09. The decision has been welcomed by the construction sector which feels the move would be leg up at a time when the industry is witnessing a slowdown in demand a price correction.
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