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Tax liability will depend on international prices
It is a short-term move, says industry body
NEW DELHI: The Central Government has imposed an 8 per cent ad valorem duty on export of iron ore fines, a move expected to give respite to the mining industry, which is reeling under the pressure of lower demand and fall in prices.
“In the notification, for the words and figures ‘Rs 200 per tonne,’ the figures and words ‘8 per cent ad valorem’ shall be substituted,” the Finance Ministry said in a release issued here.
Under the new arrangement, an exporter’s tax liability will depend on international prices, instead of the quantity sold in volume terms.
On October 31, the Government had announced a fixed levy of Rs. 200 a tonne on export of iron ore fines, while it had retained the 15 per cent tax on iron ore lumps.
“The Central Government, on being satisfied that it is necessary in the public interest, makes the following amendment in the notification dated October 31,” the notification further read.
The government’s decision to levy a fixed charge on the shipment of a tonne of iron ore fines had met with widespread protests from the mining lobby, which had said that the tax would virtually lead to the closure of many small business houses trading in low grade ore.
Commenting on the Government’s move, Federation of Indian Mineral Industries Secretary General R. K. Sharma said, “this is a short-term move. The Government needs to have a vision and go for a long-term solution.”
Mineral-rich countries like Australia and Brazil did not levy export tax on raw material, Mr. Sharma added.
Earlier, in June policy makers had levied a 15-per cent tax on iron ore exports to increase its domestic availability and ease rising input cost pressure on steel producers.
At present, iron ore prices have slipped to about $70 from $150-200 a tonne in March-April, amid the global economic slowdown. — PTI
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