SAIL : Goa wants export tax on iron ore fines to go

Industry News 2011-05-02 14:45:29

Source : SAIL

Published on : 2nd May 2011

Days after Goa chief minister Mr Digamber Kamat sought Indian prime minister Dr Manmohan Singh’s intervention in removing the 20% ad valorem export duty on iron ore fines, the mines ministry has said that exports be allowed till domestic steel makers build enough capacity to consume the entire fines production of 126 million tonnes.

In a letter to the prime minister on March 11th 2011, Mr Kamat had said the government’s decision to impose an ad valorem 20% duty on iron ore would adversely affect the financial health of hit the coastal state. 

Mr Kamat said that “The enhanced duty will only serve to curtail the export of iron ore from my state, which will drastically reduce our revenue resources. Besides, mining and tourism are the backbone of the Goan industry, so they have to be encouraged both in the interest of the nation and the state.”

Mines Secretary Mr S Vijay Kumar, however, wrote to revenue secretary Mr Sunil Mitra on March 21 that the export duty on iron ore needed to be calibrated with incentivisation of pelletization and also enhancement of the agglomeration capacity.

He said that “Unless such capacity came up, any export duty on fines may at best, be oriented towards mopping up of revenue rather than restricting exports.”

Mr Vijay Kumar called for a strategy for creation of agglomeration capacity to conserve ore, so that fines can be utilized. He said that “If that is not done, exports will be necessary so that fines do not block the pithead and create environmental problems.” 

He argued that the removal of export duties on pellets announced in the last budget be positioned as a long term strategy for creation of pelletization capacity.

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