Steel export duty hurts developers of SEZs

The Central Board of Excise and Customs had on May 10 levied export duty of 5-15 per cent on various iron and steel products. The notification is also applicable to supplies from the domestic tariff area (DTA) to SEZs.

Steel is a key input in building SEZs as well for engineering-based zones that manufacture auto components.

Experts said the notification was aimed at exports outside India. "According to the SEZ Act, there are three aspects of exports. One is exports from SEZs to foreign countries; second, from the DTA to the zones; and third, from one zone to the other.

The CBEC notification is not applicable on the latter two. The revenue department should either issue an amendment or a clarification on this mater stating that the notification will not be applicable to supplies for consumption within the zones," said LB Signal, director general, Export Promotion Council for EoUs and SEZs.

A similar situation prevailed when the government banned export of cement on April 11 this year. However, the Directorate General of Foreign Trade later issued a clarification that the export ban will not be applicable to supplies from the DTA to SEZs.