SAIL to pass on hike in excise to consumers

Steel Authority of India Ltd (SAIL), the country’s second-largest steel producer, is expected to pass on the 2 per cent hike in excise duty on steel to consumers. A senior executive in SAIL said that any change in the excise duty was usually passed on to customers.

“When the excise duty was reduced last year, prices were revised downwards. Now that is has been hiked from 8 per cent to 10 per cent, that will also be reflected in prices. This goes to the government’s kitty. So, for us, there is no impact on our profitability.”

According to a report by research agency Crisil, the prices of steel are likely to increase by Rs 500-700 per tonne.

The manufacturing cost is also expected to increase marginally by 1 per cent due to a cess of Rs 50 per tonne levied on coal.

The report also said domestic steel demand is expected to recover by 10-11 per cent in 2010-2011 on the back of strong growth in infrastructure and automobiles.