India government to levy 5% duty on exports of iron ore pellets

NEW DELHI (Scrap Monster): The latest notification released by the country’s Central Board of Excise and Customs says India government has imposed a 5% export duty on iron ore pellets. The government had hiked the duty on iron ore fines and lumps to 30% last month, but had exempted pellets from duty.

The steel producers in the country had sought imposition of tax on pellet exports. Industry body Assocham had requested the government to impose 30% export duty on pellet exports.

According to the notification, the government was forced to impose export duty in order to prevent iron ore shortage by domestic steel industry. It notes that the pellet exports during 2012-13 were negligible, but the exports of pellets have risen considerably during the initial eight months (April to November) of the current fiscal year.

Meanwhile, the government’s decision came under severe criticism from the Pellet Manufacturers Association of India (PMAI). In a statement released yesterday, PMAI pointed out that the duty has been levied without taking into consideration the views of the pellet manufacturers in the country. According to PMAI, the current pellet exports by the country accounts to only 1.2% of the country’s installed capacity. The association noted that the 5% levy on pellet exports would kill the industry.