ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Anomalous Import Tariff

Anomalous Import Tariff Hansavivek AHMEDABAD ADVANCE MILLS' special alloy steels division has formulated a scheme whereby its dependence on imports of hot rolled stainless steel strips would be considerably reduced. It is seeking government permission to import a hot rolling mill. In anticipation, a new plot of land near Navsari in Gujarat has been bought, so that some infrastructure is made readily available to take advantage of the production of hot rolled strips as soon as government clears the project, The company has been continuously striving since inception of the metals and special alloys steels divisions to substitute imports. However, the process of import substitution has run into several problems. For example, these divisions, in a move towards upgrading the technology, tried some years ago to supply more and more stainless steel Strips to industrial end-users and to taper down supply to the utensil industry. But the tariff structure since the last couple of years allows the import of finished stainless steel strips by the industrial end-users after paying a concessional rate of 40 per cent duty, whereas the company's raw material is charged at the maximum rate of 220 per cent import duty. The result is that the industrial end-users get their finished product at a landed price after duty which is almost half of the price the company has to pay for the raw material, This has compelled the company's special alloy steels division to depend almost entirely on the stainless steel market for utensil manufacture. Over and above this, last year even the raw material tost is further monitored by charging the company substantially more than the landed cost plus maximum duty, MMTC, moreover, compels the com- oany to open letters of credit before it even floats the tender with the for eign suppliers, but the price to be charged to the company is decided months later just before the material reaches the Indian port. This makes it impossible for the company to plan any sales policy in advance. Naval H Tata, chairman, has appealed to government that basically there should be differential duty on the raw material (hot rolled strips) and finished product (cold rolled strips) of all varieties in the interest of promoting further import substitution.

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