Budget 2022: Aluminium, copper industries share recommendations, expectations

“To entail cost-competitiveness, the domestic aluminium industry has requested the government’s help in the reduction of basic customs duty and correction of inverted duty structure on critical raw materials including pet coke, caustic soda, aluminium fluoride, alumina, etc for aluminium industry value chain. We have also requested for an increase in tariff rate of basic customs duty for aluminium and article from 10 percent to 15 percent in line with the steel sector,” the Aluminium Association of India told CNBC-TV18.

It added that an increase in the basic customs duty of primary aluminium from 7.5 percent to 10 percent, aluminium scrap from 2.5 percent to 10 percent, and downstream aluminium products from 7.5 percent to 10 percent has also been requested.

The Ministry has batted for a reduction in customs duty and correction of inverted duty structure for important raw materials like calcined pet coke, raw petcock, caustic soda lye, etc.

Sources say the Mines Ministry may have recommended a reduction in duty from 7.5 percent to 5 percent for the raw materials meant for aluminium production. The industry had highlighted that the government needs to reduce customs duty and correct inverted duty structure on important raw materials like pet coke, caustic soda, etc as an increase in the cost of production is not helping the industry to become globally competitive.

Interestingly this time, the Mines Ministry has also recommended nil duty on import of copper concentrate. This, after the copper industry has been lobbying for over 4-5 years. Most recommendations have been given keeping in mind the government’s big focus on manufacturing. Also, copper and aluminium are the key metals in many newer areas of focus like renewable, advanced chemistry cells, etc.

However, the industry’s demand for higher import duty on both aluminium and copper scrap has not been taken up for consideration by the ministry yet. The aluminium industry had highlighted that the imports have increased to 66 percent in FY21 leading to a forex outgo of Rs 15,000 crore and the copper industry had sought an increase in the duty for scrap for responsible recycling and to restrict the import of low-grade copper scrap.

The aluminium industry has also fielded that coal cess, which is at Rs 400 per million tonne (MT), needs to be rationalised to support the power-intensive industry. This expectation comes on the back of the fact that the GST Compensation Cess on coal under the GST regime was to be levied only for the first five years from July 1, 2017 to July 1, 2022.