By Bharat RatnaSteel Pipes

• Govt. asked steel manufactures to reduce the prices to make supplies available in domestic market

• Govt. of India raised duties on long steel products and iron ore to tame inflation

• Govt. of India scrapped export duties on flat rolled products to save the profits and margins of steel manufacturers

• Rs.15,000 excise duty on 1500-1999 cc Multi & Sports Utility Vehicles and Rs.20,000 excise duty on 2000 cc and above

Iron and Steel is crucial to the development of any modern economy and is considered to be the backbone of the human civilisation. The level of per capita consumption of steel is treated as one of the important indicators of socio-economic development and living standard of the people in any country. It is a product of a large and technologically complex industry having strong forward and backward linkages in terms of material flow and income generation. All major industrial economies are characterised by the existence of a strong steel industry and the growth of many of these economies has been largely shaped by the strength of their steel industries in their initial stages of development.

PRICING

The pricing mechanism of the Joint Plant Committee (JPC) operating from 1964

was abolished with effect from 16^th January, 1992. Producers and manufacturers of Iron and Steel, are now free to announce their prices, which are now governed by market forces of demand and supply.

• In 2007-08(Apri-June''07), production of Finished (Carbon) Steel was 12.088 million tonnes(Prov).

• Production of Pig Iron in 2007-08(April-June'07) was 1.165 Million Tonnes (Prov).

• The share of Main Producers (i.e SAIL, RINL and TSL) and secondary producers in the total production of Finished (Carbon) steel was 33% and 67% respectively during the period 2007-08 (April-June, 2007).  

Last month Government of India asked steel producers to reduce the prices of Iron and Steel for domestic supplies. Industry had also responded and accepted to cut the prices 5 to 10 per cent on the iron and steel products. The public and private steel manufacturers agreed that they would cut the price on long products used in construction by 2,000 rupees ($48) a tonne, or 5.5 percent and 10 per cent reduction on flat products by 4,000 rupees ($97) a tonne.

At the same time, Iron and Steel manufacturers sought some reduce on export duties on some products to save their profit margins.

The Finance Ministry said in their statement on Friday 13 June 2008, that Govt. of India raised export duties on long steel products and iron ore to boost local supplies. Government of India also exempted the export duties on flat-rolled products for not to hurt the profits and margins of steel manufacturers.

Further the finance ministry said it was exempting flat-rolled products of iron and steel, including galvanized products, and pipes and tubes from export duty. This measure has taken by the ministry based on their request not to hurt the profits and margins.

The government wants to reduce the inflation and raised the rate of export duty to 15 per cent from the existing 10 per cent on long products, such as bars and rods. Government felt that this measure would improve the availability of steel products in the domestic market. Duty on iron ore was also raised to a uniform 15 percent ad valorem to keep good quality ore and adequate supplies at a reasonable price in the country.

Excise duty on Multi Utility Vehicles (MUVs) and Sports Utility Vehicles (SUVs) which are exceeding 1500 cc has been increased to 24 percent.

Specific Duty of Rs. 15,000/- ($350) per unit, has imposed on the vehicles with engine capacity of 1500-1999 cc and Rs.20,000/- duty on the vehicles of 2000 cc or above.