CHITTAGONG, Apr 21: Steel producers having opposing interests are now at loggerheads over the duty rates of imported billet consumed by the re-rolling mills.
Re-rolling mills consuming greater volume of billets are strongly in favour of lowering duty on billet while some local producers of billets want that the duty be hiked further to protect the 'domestic industry'.
A section of re-rolling mills have urged the government to reduce customs duty on import of billet to Tk 2500 from existing Tk 3500 per tonne.
They have warned that any further enhancement of duty would push up the cost of production of steel products including MS rod.
The millers who favour import of billet at lower rate of duty said an increase in the prices of steel products would leave a disastrous impact on infrastructure development and real estate sector.
However, the Bangladesh Auto Re-rolling and Steel Mills Association (BARSMA) has demanded
enhancement of customs duty on billet to a reasonable level to help protect the local industries. It has demanded withdrawal of VAT (value added tax) and AIT (advance income tax) on import of chemicals like ferrous, silica, and manganese used in billet manufacturing.
"Billet produced by 20 units locally is more than enough to meet the domestic demand for the same. But most of these industries cannot sell their products as a large quantity of billet is being imported from abroad. A good amount of valuable foreign exchange is thus being spent while local products remain unsold," said Amanul Hoq Iqbal, managing director of the Saleh Steel Industries Ltd at Nasirabad industrial area in the city.
"We have urged the government to enhance customs duty on billet import to protect national interest and withdraw 15% VAT and 5% AIT on chemical import," said Mr. Iqbal, also a leader of the BARSMA.
However, re-rolling steel millers who support billet import, said the country is yet to be self-reliant on billet production. The local mills need 4.0 million metric tonnes of billets annually while 1.5 million MT billet are imported to meet the country's demand.
During the period from January 1, 2012 to December 31, 2012 Bangladesh imported more than 1.2 million tonnes to billets from abroad and almost the same quantity was imported in 2013.
"Local melting units don't have the capacity to produce the bigger size billets. So protection of the local industries does not arise at all. Even if we do not have power shortage, billets having the quality of equivalent to that imported by us will not be produced here in next one or two years," a senior executive said.
"None except the profit-mongers would be benefited by any hike in duty on imported billets," he said.
"Despite above facts, if duty is increased, we fear a 2008-like situation will re-appear when the government had to sacrifice revenue by withdrawing duty and VAT on imported and local construction materials. This is a loss of revenue as well as weakening of the local industry," a top executive of a leading re-rolling mill said.
BARSMA leader Iqbal would not agree that Bangladesh needed to import billet from abroad. He said the local auto steel millers are not only capable to supply country's total requirement but also can export a good volume of local billets.
"It is not true that the local industries are producing sub-standard billets. All our grades have been tested by the BUET Civil Engineering Department and certified as satisfactory. On the other hand, sub-standard billets are being imported in the country. The percentage of manganese, main element of iron, in RB 500W is as low as 0.634 in imported billets while the BSTI (Bangladesh Standard & Testing Institute) standard for the same is 1.70," he claimed.
Re-rolling millers divided over duty rates on imported billets
Pankaj Dastider | Published: April 22, 2014 00:00:00 | Updated: November 30, 2026 06:01:00
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