Commerce Ministry may be looking to include steel in export incentive scheme

Steel exports are currently outside the scope of the Remission of Duty and Taxes on Export Products (RoDTEP) scheme, which offers refunds against various embedded taxes across sectors such as automobiles and agricultural produce.

Levies, duties and taxes, which are not subsumed in the goods and services tax, can add 8-12 percent to costs for the steel industry, said Reuters quoted Alok Sahay, secretary general and executive head at Indian Steel Association. "The steel industry needs RoDTEP to offset these embedded costs of the industry for parity with other exporting countries," Sahay said.

The source told Reuters that the government will have to set aside nearly $244 million annually to offer refunds to the steel sector, the source added. "The government is also considering requests for inclusion of more sectors into the production-linked incentives scheme,” the source added.

During the July-September quarter, the steelmakers took a hit on profitability as prices declined due to slowing global demand and export tax on some steel products further affected shipments. In May, the government raised the export taxes on eight steel intermediates by 15 percent.