Assocham moots 40-per cent super tax on iron -ore mining
21 July 2010
Industry body Assocham has called for the levy of a 40 per cent super profits tax on mining activities in order to reduce exports of iron ore. The association also supported the steel ministry's demand for a complete ban on high grade iron ore exports.
"Assocham has sought a complete ban on exports of iron ore having more than 60 percent iron content in it ... 40 percent resource rent tax uniformity should be imposed across the mining sector to check the windfall profits made by iron ore miners in case the former cannot be considered," the chamber said in a statement.
It said a resource rent tax, if levied, could check "windfall profits made by iron ore miners."
Assocham said that it has informed Prime Minister Manmohan Singh that the present duty structures have failed to restrict exports of iron ore.
According to the chamber, private iron ore miners, making a windfall profit by exporting iron ore, have created a myth that iron ore fines are in excess in India as the Indian steel industry is not equipped to use the same. "However, it is a total distortion of facts as most of the integrated steel plants using sinter and pellets use iron ore fines extensively which results in increased efficiency of iron making process," the chamber said.
According to the chamber, China, the largest importer of Indian iron ore, has been increasing export tax on commodities like coal, coke and steel products to conserve its raw material. Therefore, Assocham suggested that in case if a complete ban on exports of iron ore with more than 60 per cent iron content is not possible, India should at least follow similar practices.
In April, the government had raised the export duty on iron ore lumps to 15 per cent from 10 per cent.
At present, there is a 5 per cent export duty on iron ore fines.