Steel makers oppose proposed hike in duties on raw materials

The country's auto re-rolling and steel mill owners strongly opposed Sunday the proposed hike in specific duties on raw materials used for making billets and ingots.
If implemented, the enhanced duties will create an adverse impact on the local steel manufacturers, they said.
"The increased duties would create an adverse impact on the local steel makers which may cause to push import of finished goods and many local factories may face closure", said Chairman of Bangladesh Auto Re-Rolling & Steel Mills Association (BARSMA) S K Masadul Alam Masud.
The BARSMA chairman was speaking at a post-budget press conference held at Dhaka Reporters Unity (DRU).
Among others, Chairman of Bangladesh Steel Mill Owners Association Sheikh Fazlur Rahman Bokul and General Secretary of Bangladesh Re-Rolling Mills Association (BRMA) Mohammad Abu Bakar Siddique were present on the occasion.
BARSMA Secretary General Abul Kashem Majumder presented a key-note paper at the press conference that contained their demands along with their strong reactions to the budget proposal.  
The BARSMA chairman said whereas the industry insiders demanded a Tk 500 per tonne decrease in import duty on the raw materials for manufacturing billets and ingots, proposal has been made for a Tk 500 increase to the previous amount of Tk 1,500.
Mr Masud said the local steel producers are already paying more duties than those of the importers adding that the latest duty hike might put the producers into an uneven competition with their global rivals.
He said considering the ongoing hardship of the local manufacturers, the re-rolling and steel millers had proposed to the government to increase import duty to Tk 5,500 per tonne from the present Tk 3,500 and impose a 15 per cent VAT (value added tax) on MS (mild steel) billets and ingots.
"But, unfortunately, the government has increased it to only Tk 5,000 per tonne", the leader added.
He also renewed their request to reduce VAT and duties against import of raw materials that are used to make MS rod in a bid to curtail the price and also for survival of the local industry.
The leader said the price of MS rod and other items are likely to go up further, unless the authorities take necessary protecting measures like increased facilities for the local industry.
Protesting the enhanced tax at source level, the metal industry leaders alleged that the government is providing additional budgetary facilities for the importers that would create an unequal competition among the market players namely importers and local producers. Mr Masud urged the government to exempt all types of VAT against production of ingots and billets for local steel mills to compete with the importers.
"Due to the uneven market atmosphere, about 100 re-rolling and steel mills have already been closed over the years", the industry leader said adding that another 300 mills are fighting for their survival.
In addition, the industry players also placed nine-point specific demands including exemption of 15 per cent VAT and other tariffs from the source level.
Their other demands include tax exemption from major raw materials like imported chemicals for billet production and withdrawal of existing 4.0 per cent tax from the raw materials of the local industry.