National

Duty sops for steel, aviation sectors

NEW DELHI: In a significant relaxation to certain key sectors hit by the ripple effects of the ongoing global crisis, the government on Friday announced major duty incentives to the steel industry as also the aviation sector with immediate effect.

In the wake of the global slump and consequent decline in the prices of iron and steel, the government has withdrawn the export duty on items such as pig iron, iron and steel ingots, bars and rods. Alongside, it has also abolished the five per cent customs duty on aviation turbine fuel (ATF), a Finance Ministry statement here said.

With the objective of improving the export competitiveness of the mining industry while also protecting the interests of employees in the sector, the 15 per cent ad valorem export duty on iron ore fines has been replaced with a specific duty of Rs.200 a tonne.

However, the export duty on iron ore lumps has been kept unchanged at 15 per cent. The export duty on scrap would also continue at the same level, it said.

The export duty on iron and steel products was introduced in May 2008. The statement noted that the changes now being effected were owing to the fact that the international price of iron ore fines “has gone down substantially making their exports unremunerated.”

Also, to provide relief to the air carriers which were experiencing financial stress on account of high prices of ATF, the five per cent customs duty on aviation fuel stands abolished. “The exemption would result in lowering of the base price of ATF and, consequently, lowering the incidence of excise duty and VAT, giving substantial relief to the aviation sector,” it said.

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