Monday, 19 Mar 2012
Seeking to address the coal shortage affecting the power and steel sectors, government has announced a slew of measures for enhancing its availability in the Budget, a development welcomed by Coal India Ltd.
Mr Zohra Chatterji CMD of CIL said that "We welcome the removal of import duty on coal.”
The Coal Ministry is of the view that development would lead to an increase in import of fossil fuel to the country.
While presenting the Budget for 2012-13, Finance Minister Pranab Mukherjee said that "I propose to ease the situation by providing full exemption from basic customs duty and a concessional CVD (Countervailing Duty) of 1% to steam coal for a period of two years till March 31, 2014."
On the proposals, Coal Secretary Mr Alok Perti said that "The exemption will result in increase in import of non-coking coal by around one million tonnes as the prices of the dry fuel would come down.”
The coal ministry had pitched for the reduction in the duty and had even written to the Finance Ministry on the same prior to the budget announcement.
Singareni Collieries Company Ltd CMD S Narsing Rao, however, said the duty exemption would not have much impact on the domestic coal industry.
The government has proposed to remove 5% customs duty on non-coking coal.
According to an official in the state-owned firm, the duty exemption will also result in reducing the demand-supply gap of fossil fuel.
Power sector is one of the main consumers of non coking coal and nearly two third of the electricity generation in the country is coal based.
The power sector is likely to miss the non-coking coal import target of 55 million tonnes for the current fiscal as companies have imported only 30 million tonnes till December.
Source - www.indianexpress.com
Showing posts with label import duty. Show all posts
Showing posts with label import duty. Show all posts
Monday, March 19, 2012
Monday, January 30, 2012
India Govt should exempt levy over coal for affordable power
Mon, Jan30, 2012
NEW DELHI (Commodity Online): To ensure the accessibility of power at affordable costs, the industry body the Associated Chambers of Commerce and Industry of India (ASSOCHAM) wants the India Government to exempt thermal or steam Coal from basic customs duty and countervailing duty.
The customs duty and countervailing duty for thermal or steam coal which increase the power tariff by 25 paise per unit and go against the basic tenets of ensuring long-term fuel sustainability and energy security.
Power sector is one of the highest taxed due to non-availability of any input tax credit on excise, countervailing duty, value added tax and service tax and the imported coal is subject to imposition of 7.55% customs duty for imports from Indonesia and 10.83% for imports from other countries.
According to DS. Rawat, Secretary General, ASSOCHAM, higher power tariff tends to have recessionary impact due to cascading effect on all goods and services. Major countries like the United States, Canada, Australia, Japan and Brazil do not levy any customs duty on import of thermal coal.
In addition, there is countervailing duty of five per cent. This distorts the field in favour of domestic Coal based projects and discourages investments in imported coal based projects.
Also the independent power producers resorting to coal imports are adversely affected by the volatility in prices of imported coal, unpredictable long-term pricing arrangements, volatility in shipping rates and exchange rates, logistical and infrastructural constraints for moving imported coal from ports to power stations.
“To bridge the gap in demand and supply, the emphasis is clearly on importing thermal coal or acquiring new mines abroad. It is anticipated that shortage of domestic coal will continue to persist over the medium term as the additional coal generation programme is not likely to catch up with the growing demand led by aggressive capacity addition to align with economic growth targets.”said Rawat.
Thermal generation (coal, lignite and gas) continues to play 65% share of generation capacity with domestic coal supply not sufficient to meet the requirements.
(sourced Commodity Online.com)
NEW DELHI (Commodity Online): To ensure the accessibility of power at affordable costs, the industry body the Associated Chambers of Commerce and Industry of India (ASSOCHAM) wants the India Government to exempt thermal or steam Coal from basic customs duty and countervailing duty.
The customs duty and countervailing duty for thermal or steam coal which increase the power tariff by 25 paise per unit and go against the basic tenets of ensuring long-term fuel sustainability and energy security.
Power sector is one of the highest taxed due to non-availability of any input tax credit on excise, countervailing duty, value added tax and service tax and the imported coal is subject to imposition of 7.55% customs duty for imports from Indonesia and 10.83% for imports from other countries.
According to DS. Rawat, Secretary General, ASSOCHAM, higher power tariff tends to have recessionary impact due to cascading effect on all goods and services. Major countries like the United States, Canada, Australia, Japan and Brazil do not levy any customs duty on import of thermal coal.
In addition, there is countervailing duty of five per cent. This distorts the field in favour of domestic Coal based projects and discourages investments in imported coal based projects.
Also the independent power producers resorting to coal imports are adversely affected by the volatility in prices of imported coal, unpredictable long-term pricing arrangements, volatility in shipping rates and exchange rates, logistical and infrastructural constraints for moving imported coal from ports to power stations.
“To bridge the gap in demand and supply, the emphasis is clearly on importing thermal coal or acquiring new mines abroad. It is anticipated that shortage of domestic coal will continue to persist over the medium term as the additional coal generation programme is not likely to catch up with the growing demand led by aggressive capacity addition to align with economic growth targets.”said Rawat.
Thermal generation (coal, lignite and gas) continues to play 65% share of generation capacity with domestic coal supply not sufficient to meet the requirements.
(sourced Commodity Online.com)
Wednesday, January 25, 2012
Assocham seeks 10% import duty on steel products
Wed, Jan25, 2012
New Delhi: Industry body Assocham has called for raising the import duty on steel products from 5 per cent to a minimum of 10 per cent so that local manufacturers have a level playing field vis-a-vis imports from China and the Commonwealth of Independent States (CIS) countries.
The challenging global environment has resulted in fierce competition and increased pressure on performance and price reduction.
“The oversupply in international markets is forcing China and the Commonwealth of Independent States (CIS) to dump their steel products like hot-rolled coils... and other coated products into growing markets like India,” said the Assocham Secretary General, Mr D.S. Rawat.
As a result, the Indian steel industry has reduced its production and is running at lower capacity utilisation, he said.
China and CIS countries possess huge coking coal and iron ore resources, which give them cost-competitiveness, whereas India depends on imports for its requirement.
In the past one year, coking coal prices have increased by more than 100 per cent, putting an additional burden on steel manufacturers. Nearly 50 per cent of the steel manufacturing cost is on account of coking coal and 20 per cent on account of iron ore.
“Most importing nations protect their domestic producers by imposition of a marginally higher import duty while encouraging exports by offering various incentives,” Mr Rawat said.
Raising import duty to a minimum of 10 per cent will encourage the growth of the domestic steel industry and ensure that the India growth story is kept intact, he said in a pre-Budget memorandum to the ministries of finance and steel.
In the next two years, steel-making capacity is set to expand by 15-20 million tonnes to meet the growing demand for high-end consumer products like cars, fridges and washing machines.
Keywords: Assocham, steel products, import duty, China, CIS countries, imports, exports
(sourced Business Line)
New Delhi: Industry body Assocham has called for raising the import duty on steel products from 5 per cent to a minimum of 10 per cent so that local manufacturers have a level playing field vis-a-vis imports from China and the Commonwealth of Independent States (CIS) countries.
The challenging global environment has resulted in fierce competition and increased pressure on performance and price reduction.
“The oversupply in international markets is forcing China and the Commonwealth of Independent States (CIS) to dump their steel products like hot-rolled coils... and other coated products into growing markets like India,” said the Assocham Secretary General, Mr D.S. Rawat.
As a result, the Indian steel industry has reduced its production and is running at lower capacity utilisation, he said.
China and CIS countries possess huge coking coal and iron ore resources, which give them cost-competitiveness, whereas India depends on imports for its requirement.
In the past one year, coking coal prices have increased by more than 100 per cent, putting an additional burden on steel manufacturers. Nearly 50 per cent of the steel manufacturing cost is on account of coking coal and 20 per cent on account of iron ore.
“Most importing nations protect their domestic producers by imposition of a marginally higher import duty while encouraging exports by offering various incentives,” Mr Rawat said.
Raising import duty to a minimum of 10 per cent will encourage the growth of the domestic steel industry and ensure that the India growth story is kept intact, he said in a pre-Budget memorandum to the ministries of finance and steel.
In the next two years, steel-making capacity is set to expand by 15-20 million tonnes to meet the growing demand for high-end consumer products like cars, fridges and washing machines.
Keywords: Assocham, steel products, import duty, China, CIS countries, imports, exports
(sourced Business Line)
Monday, January 23, 2012
Indian government may make coal imports cheaper for power companies
Monday, 23 Jan 2012
Business Standard reported that the Indian government may ease import of coal to tide over the requirement for power generation companies and other infrastructure utilities.
Official sources said while Customs duty may not be completely rolled back, a partial rollback of the countervailing duty on imports done for power infrastructure projects is being considered by the finance ministry.
They added the consideration is for relaxing the five per cent CVD, if the import was specifically meant for thermal power generation or coal based power plants and related infrastructure projects. At present, there is a five per cent Customs duty on non coking coal, besides one per cent excise duty, announced on 130 items in the last Budget. This was done when the government proposed a levy of one per cent excise duty on 130 items without Cenvat credit.
If Cenvat credit is taken, then these goods will attract a tariff of 5%. This applies to all categories of coal imports lignite, peat, coke, tar, etc. They explained that CVD was imposed to provide a level field for domestic manufacturers and charged at a rate equal to the excise duty.
Cenvat credit means the credit availed by a goods manufacturer in the form of a deduction of input tax paid on the purchase of raw materials, fixed assets, packing material, etc, from the total tax payable to the government.
CVD is also called anti-subsidy duty. Besides industry representation, the power ministry has also suggested to the finance ministry for a relook into the coal import duty structure. It feels while global coal prices have gone up 35 to 40% additional import duty is adding to the cost.
(Sourced from BS)
Business Standard reported that the Indian government may ease import of coal to tide over the requirement for power generation companies and other infrastructure utilities.
Official sources said while Customs duty may not be completely rolled back, a partial rollback of the countervailing duty on imports done for power infrastructure projects is being considered by the finance ministry.
They added the consideration is for relaxing the five per cent CVD, if the import was specifically meant for thermal power generation or coal based power plants and related infrastructure projects. At present, there is a five per cent Customs duty on non coking coal, besides one per cent excise duty, announced on 130 items in the last Budget. This was done when the government proposed a levy of one per cent excise duty on 130 items without Cenvat credit.
If Cenvat credit is taken, then these goods will attract a tariff of 5%. This applies to all categories of coal imports lignite, peat, coke, tar, etc. They explained that CVD was imposed to provide a level field for domestic manufacturers and charged at a rate equal to the excise duty.
Cenvat credit means the credit availed by a goods manufacturer in the form of a deduction of input tax paid on the purchase of raw materials, fixed assets, packing material, etc, from the total tax payable to the government.
CVD is also called anti-subsidy duty. Besides industry representation, the power ministry has also suggested to the finance ministry for a relook into the coal import duty structure. It feels while global coal prices have gone up 35 to 40% additional import duty is adding to the cost.
(Sourced from BS)
Thursday, November 3, 2011
Hike in import duty on power equipments will hurt us: NTPC
Thu, Nov 03, 2011 | Source : CNBC-TV18
India is in the midst of a massive power crisis with shortage of coal being cited as one of the key reasons. However, speaking to CNBC-TV18, Arup Roy Choudhury, CMD of state-run power generator NTPC said, things have definitely improved in the last couple of weeks.
The mining space was under severe stress of late with a barrage of issues ranging from political agitation to worker strikes. “We also had the aftereffect of the monsoon season to deal with,” Choudhury said adding. “…but all seems well going forward, and the generations have again picked up.”
NTPC’s plant load factor or PLF is up over 90%, informed Choudhury. He expects power generation to be much better in the third quarter compared to the previous one.
On the issue of imported coal, Choudhury said, it is not a viable option for Indian power producers. “We have to look at power generation through domestic coal,” he stated.
An important government meeting is scheduled today to consider imposing duty on imported power equipment. According to Choudhury, any increase in import duty will be a negative for NTPC. “It will have a direct ramification on power prices,” he added.
Last week, boosted by a better-than-expected top line growth, NTPC posted a 15% rise in net profit at Rs 2,424 crore during the second quarter of the current fiscal.
Below is the edited transcript of Choudhury’s interview with CNBC-TV18. Also watch the accompanying video.
Q: How bad is the coal shortage situation now? Is it a bit better than how it was three weeks back when we were hearing things like companies are working with one week supply or do things remain as difficult as that?
A: Well has definitely improved. If one can see how supply from our stations are growing. We had a critical situation where we had everything coming at one go. We had the Telangana agitation, Coal India’s strike for a day. We also had after effect of heavy monsoon. So that is over now and generations have picked up again. It is looking good at the moment.
Q: Will PLFs go up significantly now?
A: As of now today our PLFs are more than 90%.
Q: Do you see a temporary respite or a durable solution to the raw material issue because these things keep coming back and some of the private producers are still talking about fairly tight supply?
A: I don’t think I should make a bigger comment. But NTPC is a generating company and we have demonstrated time and again that with everything being available we are able to generate at the highest level.
Internationally also we are the number one company in capacity utilisation. But the main fear is coal and I don’t think imported coal is a solution because it increases the cost of power. So we have to look at domestic coal mining and exploit our reserves.
Q: We also hear that the Coal Ministry is almost set to restore the five captive coal block allotments to NTPC in a week but earlier there was a talk of cancellation on ground of delays in development. Have you heard anything on that front?
A: Yes you are right. It is going to get restored any day. We have been given connection for another 8,000 megawatt capacity. We received a letter saying that we will be given captive mines for that. So that improves our position. We will be able to do a majority of our own coal needs through our domestic mining in the next three to four years.
Q: There is an important meeting today in afternoon where the government is meeting to consider imposing duty on imported power equipment. If that comes through how could it affect companies like you who use such equipment? Could it be negative?
A: Well we are driving at reducing the cost of power. One of the important components is fixed cost which goes by cost of imported equipments or equipments. There is already a 15% purchase preference which is being enjoyed by domestic suppliers. Any increase beyond this is only going to load price of electricity.
India is in the midst of a massive power crisis with shortage of coal being cited as one of the key reasons. However, speaking to CNBC-TV18, Arup Roy Choudhury, CMD of state-run power generator NTPC said, things have definitely improved in the last couple of weeks.
The mining space was under severe stress of late with a barrage of issues ranging from political agitation to worker strikes. “We also had the aftereffect of the monsoon season to deal with,” Choudhury said adding. “…but all seems well going forward, and the generations have again picked up.”
NTPC’s plant load factor or PLF is up over 90%, informed Choudhury. He expects power generation to be much better in the third quarter compared to the previous one.
On the issue of imported coal, Choudhury said, it is not a viable option for Indian power producers. “We have to look at power generation through domestic coal,” he stated.
An important government meeting is scheduled today to consider imposing duty on imported power equipment. According to Choudhury, any increase in import duty will be a negative for NTPC. “It will have a direct ramification on power prices,” he added.
Last week, boosted by a better-than-expected top line growth, NTPC posted a 15% rise in net profit at Rs 2,424 crore during the second quarter of the current fiscal.
Below is the edited transcript of Choudhury’s interview with CNBC-TV18. Also watch the accompanying video.
Q: How bad is the coal shortage situation now? Is it a bit better than how it was three weeks back when we were hearing things like companies are working with one week supply or do things remain as difficult as that?
A: Well has definitely improved. If one can see how supply from our stations are growing. We had a critical situation where we had everything coming at one go. We had the Telangana agitation, Coal India’s strike for a day. We also had after effect of heavy monsoon. So that is over now and generations have picked up again. It is looking good at the moment.
Q: Will PLFs go up significantly now?
A: As of now today our PLFs are more than 90%.
Q: Do you see a temporary respite or a durable solution to the raw material issue because these things keep coming back and some of the private producers are still talking about fairly tight supply?
A: I don’t think I should make a bigger comment. But NTPC is a generating company and we have demonstrated time and again that with everything being available we are able to generate at the highest level.
Internationally also we are the number one company in capacity utilisation. But the main fear is coal and I don’t think imported coal is a solution because it increases the cost of power. So we have to look at domestic coal mining and exploit our reserves.
Q: We also hear that the Coal Ministry is almost set to restore the five captive coal block allotments to NTPC in a week but earlier there was a talk of cancellation on ground of delays in development. Have you heard anything on that front?
A: Yes you are right. It is going to get restored any day. We have been given connection for another 8,000 megawatt capacity. We received a letter saying that we will be given captive mines for that. So that improves our position. We will be able to do a majority of our own coal needs through our domestic mining in the next three to four years.
Q: There is an important meeting today in afternoon where the government is meeting to consider imposing duty on imported power equipment. If that comes through how could it affect companies like you who use such equipment? Could it be negative?
A: Well we are driving at reducing the cost of power. One of the important components is fixed cost which goes by cost of imported equipments or equipments. There is already a 15% purchase preference which is being enjoyed by domestic suppliers. Any increase beyond this is only going to load price of electricity.
Sunday, February 6, 2011
ASSOCHAM calls for raising import duty on HR steel
Sunday, 06 Feb 2011
The Associated Chambers of Commerce and Industry of India in the interest of domestic steel Industry has stressed upon raising the import duty on hot rolled coils from prevalent 5% to minimum 10% to encourage the growth of domestic steel industry.ASSOCHAM feels that pro active policy measures adopted by Government of India can help expand the HR capacity by additional 8 million tonne during 2011-12, making India surplus for HR by more than 6 million tonne.In a proposal to the ministry of finance, ASSOCHAM has urged the government to raise import duty on HR minimum by 5%. It is imperative to mention that India used to be a net exporter of HR during the last decade but it has become a net importer since past 5 years and has already imported around 2 million tonne of HR Coils in the current financial year. China along with CIS accounts for almost 75% of total imports.ASSOCHAM has pointed out that excess capacity coupled with cost competitiveness are fundamental reasons for export of primary input raw materials for manufacturing steel ie iron ore, coking coal. Coking coal contributes approximately 50% of total cost while 20% cost is contributed by iron ore.Countries like China and CIS with excessive raw material resources are cost-competitive in the international market. China stimulates exports by giving an export incentive of 9% on HR Coils, on the contrary coking coal pries have increased by over 100% thereby, pressurizing cost-competence of Indian steel producers.ASSOCHAM has also outlined four fundamental factors that present adverse scenario for Indian steel companies producing HR Coils - excess capacities in China and CIS countries, cost competitiveness due to cheap source of raw material esp. coking coal, 9 %incentive given to Chinese exporters, new HR Coil capacities developing in India.
The Associated Chambers of Commerce and Industry of India in the interest of domestic steel Industry has stressed upon raising the import duty on hot rolled coils from prevalent 5% to minimum 10% to encourage the growth of domestic steel industry.ASSOCHAM feels that pro active policy measures adopted by Government of India can help expand the HR capacity by additional 8 million tonne during 2011-12, making India surplus for HR by more than 6 million tonne.In a proposal to the ministry of finance, ASSOCHAM has urged the government to raise import duty on HR minimum by 5%. It is imperative to mention that India used to be a net exporter of HR during the last decade but it has become a net importer since past 5 years and has already imported around 2 million tonne of HR Coils in the current financial year. China along with CIS accounts for almost 75% of total imports.ASSOCHAM has pointed out that excess capacity coupled with cost competitiveness are fundamental reasons for export of primary input raw materials for manufacturing steel ie iron ore, coking coal. Coking coal contributes approximately 50% of total cost while 20% cost is contributed by iron ore.Countries like China and CIS with excessive raw material resources are cost-competitive in the international market. China stimulates exports by giving an export incentive of 9% on HR Coils, on the contrary coking coal pries have increased by over 100% thereby, pressurizing cost-competence of Indian steel producers.ASSOCHAM has also outlined four fundamental factors that present adverse scenario for Indian steel companies producing HR Coils - excess capacities in China and CIS countries, cost competitiveness due to cheap source of raw material esp. coking coal, 9 %incentive given to Chinese exporters, new HR Coil capacities developing in India.
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