Aluminium industry demands reduction in custom duty on raw materials

The domestic aluminium industry has asked for a decrease in basic custom duty and correction in inverted duty structure on essential raw materials, comprising caustic soda, aluminium fluoride, pet coke, and alumina, to promote cost competitiveness in the sector. The domestic aluminium industry, under representation from the Aluminium Association of India (AAI), has asked for immediate government help through the forthcoming Union Budget 2022-23. It has additionally urged a surge in tariff rate of basic custom duty for aluminium and articles from 10 to 15% in line with the steel sector, as per the pre-budget expectations from the AAI. A surge in the basic custom duty of primary aluminium from 7.5% to 10%, aluminium scrap from 2.5% to 10% and downstream aluminium products from 7.5% to 10% has additionally been requested. The primary aluminium industry is meeting severe threats from the surging import of aluminium and scrap. The share of scrap in total imports rose from 52% in FY'16 to 71% in the first half of FY'22 and is leading to a forex outgo of $2 billion (Rs 15,000 crore) per annum. The AAI has asked for a surge in import duty on aluminium scrap at par with primary aluminium metal (planned 10%) to promote domestic recycling of indigenous scrap and encourage a circular economy. The association has asked for the elimination of a high cess on coal (Rs 400 per MT) to help the power-intensive aluminium industry in reducing its burden. The high coal cess is required to be rationalised to help the industry, and the same has been suggested by different ministries and government think tanks comprising NITI Aayog, coal ministry, mines ministry and power ministry, among others. The GST Compensation Cess on coal under the GST regime was to be levied just for the initial five years from July 1, 2017, to July 1, 2022. Image Source