Posted on 28 Sep 2021
Nepal’s Steel Rolling Mills Association (NSRMA) has slammed the government’s move to raise taxes on imports of billet. Billet, coupled with sponge iron, are the major feedstocks that Nepal imports to manufacture steel, Kallanish notes.
The government has hiked the import duty on billet to NPR 2,500/tonne ($21.10/t) from the existing NPR 1,650/t ($13.93/t). Authorities have made the provisions to collect the increased excise duty directly at customs offices. However, the customs tax and import duty of NPR 4,750/t and NPR 1,650/t, respectively, on sponge iron has been removed by the authority.
“The government decision has marred two dozen iron rod manufacturers while benefiting just six factories. The policy has appeared largely deviated in terms of benefiting the industry players,” says NSRMA vice president Kiran Prakash Saakha. “These factories could not compete in prices as their products have become more expensive by NPR 8-10/kg compared to the ones receiving benefits from the government.”
There are 30 steel manufacturing plants active in Nepal, using different production processes. About two dozen plants import billet to roll into long steel, while the remaining half a dozen use sponge iron to produce steel.
The steel rolled from billet is considered superior in terms of quality and is preferred for carrying out mega construction works. The nation imports an average of 1 million tonnes/year of billet and 350,000 t/y of sponge iron.
“Apart from impacting a majority of the manufacturers in the segment, it will also adversely affect revenue collection by the government,” concludes Saakha.
Source:Kallanish
