A slew of tax incentives to strengthen the domestic mineral market: FIMI, India
A slew of indirect tax incentives have been seeking by The Federation of Indian Minerals Industries (FIMI) to strengthen the fading mining industry.
The submission of a list of changes in indirect tax levies on various minerals and mining products by FIMI in a memorandum to the Ministry of Finance, pursuing their incorporation in the country’s budget to be placed before the Indian Parliament next month.
FIMI has solicited scrapping of the 15% export tax on bauxite. It has requested that Indian having 3.896 billion tons of bauxite reserves and being the fifth largest in the world, with 84% of the reserves being of the metallurgical grade used mainly for alumina extraction is essential to have excellent conservation of these bauxite reserves. The as large volume of aluminium smelters been installed for metallurgical grade bauxite, there are limited avenues for use of the non-plant type of bauxite with alumina content of 38% to 40% that is immensely found in the state of Gujrat.
FIMI supported that as the low-grade bauxite availability excessed the domestic demand, it was historically exported until the burden of a flat rate of 15% export duty. The Indian bauxite exported during 2015/16 was 8.91-million tons, which dropped sharply to 1.56-million tons in 2018/19 when the tax was imposed and further to 0.36-million tons in the current financial year.
The miners’ body has also sought correction in the "inverted basic customs duty" on critical raw materials for aluminium production wherein the existing structure of higher duties on inputs compared to finished product was making domestic aluminium producers uncompetitive.
The median production cost of Indian aluminium producers is ranked among the highest in the world, with FIMI observing that China promotes value addition through nil customs duty on materials used for aluminium production. On the contrary Indian producers who are heavily dependent on imported inputs have to pay high customs duties making their finished products uncompetitive against imported finished products.
Hence, FIMI has sought reduction of import duties on aluminium fluoride from 7.5% to 2.5% and caustic soda lye from 7.5% to 2.5%. This would entitle domestic aluminium producers to low their cost of production. FIMI seeks import protection for domestic producers, with an increase in basic customs duty on aluminium metal presently from 7.5% to 10%.
source: ALCIRCLE.COM
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