The Parliamentary Standing Committee on Coal and Steel, headed by MP Kalyan Banerjee, has criticised the decision of the Central government to impose 5 per cent export duty on iron ore pellets and has asked the government to revoke the hike.
The Committee, in its report, said the government had done away with the export duty on pellets since 2012-13 but was re-introduced again through a January 27 notification. “The imposition of the duty will sound the death knell for the State-owned Kudremukh Iron Ore Company Ltd. (KIOCL), which focuses exclusively on export of pellets using low grade iron ore and already facing serious problems like increased railway freight rates and lack of adequate domestic demand,” it has pointed out.
It said the Ministry of Steel stating in their Action Taken Reply (ATR) that export duty on pellets has been reduced to nil on November 27, 2013, it has now been hiked to 5 per cent. The panel argued that the government should continue with the earlier policy of zero per cent export duty on pellets so that huge investments that have already been made in the pellet industry do not become non-productive assets and render thousands of people jobless due to the gradual close down of the pellet industry. “It is always desirable that the government should proceed on the basis of their promise since in view of such promise large number of industries has made huge investments and the government should not back out from their promise. The Committee, therefore, recommends that Ministry of Steel should immediately take up the matter with Ministry of Finance at the appropriate level and apprise them of the action taken in the matter,” the panel said.
The pellet industry is of the view that there is limited scope for domestic demand for pellets as they are largely consumed by the sponge iron manufacturing units. This industry has not demanded the ban on export of pellets or imposition of export duty on these.
