Duty exemption on TMT bars, customs duty on zinc withdrawn

The government today withdrew the exemptions on countervailing duty (CVD) on imports of TMT bars, providing relief to domestic manufacturers of the items used in the construction sector.

It also withdrew exemptions on basic customs duty on zinc and ferro alloys to provide a shield to domestic producers against cheap imports.

The measures, announced by the government as part of the second stimulus package to boost demand in the economy, is expected to benefit leading companies like SAIL, Tata Steel, RINL, JSW and Hindustan Zinc.

With exemptions withdrawn, the importers will now have to bear 10 per cent countervailing duty on TMT bars and five per cent customs duty on import of zinc and ferro alloys.

"It was due and we are happy that government has announced this measure," SAIL Chairman S K Roongta said.

Echoing similar view, RINL CMD P K Bishnoi said the measure would provide a level-playing field to domestic manufacturers who have been battling against cheap imports.

RINL is one of the leading producers of TMT bars and long products in the country with total production hovering close to a million tonne per annum. Owing to slump in demand and cheap overseas arrivals of the commodity, the Mini Ratna PSU was selling its products below its cost of production for the last one month.

The zinc industry too stands to gain from import duty, as it would provide protection to the sector by making overseas shipments (about 50,000 tonnes annually) competitive.

"The duty will give reprieve to the zinc industry," Hindustan Zinc CEO Akhilesh Joshi said.

As the total surplus zinc in warehouses of London Metal Exchange (LME) had increased to a whopping 2.5 lakh tonnes, the domestic industry was apprehensive of cheap arrivals in India.