Aluminium companies seek hike in customs duty

Domestic aluminium manufacturers have urged the government to raise basic customs duty on both the primary aluminium and aluminium scrap from present 7.5% and 2.5% respectively to 10%, in the Budget for 2021-22, to rein in the rising imports.

They also want to eliminate GST compensation cess on coal, around Rs 400 per tonne, to support the power-intensive aluminium industry.

In their representation to the finance ministry, the industry association has said that despite sufficient domestic capacity, nearly 60% of the domestic demand is currently being met through imports against the spirit of the self-reliance India.

“Aluminium imports witnessed a huge surge in recent years primarily from China, ASEAN countries and the Middle East having surplus aluminium capacity. These countries support their aluminium industry and provide subsidies with low-interest rate loans, cheaper power tariffs, preferential gas allocation, raw materials availability, tax benefits and export tax incentives bringing down the production costs to render competitiveness for their domestic industry,” the industry said.

In comparison to India’s current installed capacity of 4.1 million tonnes per annum (MTPA), domestic demand for aluminium is around 3.7 MTPA. However, imports in 2019-20 were at 2.15 MT or around 60% of the demand.