With inconsistency in the valuation of tariff value for import of brass scrap, the situation is turning worse for manufacturers of brass parts in the country. There are about 50,000 units all over the country situated mainly in Gujarat, Uttar Pradesh (UP) and Maharashtra which are involved in the exports of brassware and handicraft products.
The customs and revenue department has recently increased the tariff value (Notification No 131/2008 (NT) dated December 15) of brass scrap from $3,525 to $4,082 per tonne for the purpose of assessment and revenue, whereas brass scrap is available in the international market at $1,750-$2,000 per tonne (CIF India) depending upon grade and quality. Brass is an alloy of copper and zinc, with copper constiuting 60% of the metal.
?Assuming that the 60% of copper prices (considering $3,000 per tonne) prevailing at the international market comes to around $1,800 a tonne when brass scrap is available at $1,700-$1,800, we don?t understand the formula of how the department has derived the price of $4,082 a tonne, which is 127.24% of the price of copper traded on the LME,? Rohit Shah, former president and director, Bombay Metal Exchange, told FE.The tariff value of brass scrap should be at 50% – 60% of copper prices prevailing at the LME, he suggested.
Shah also said that the concerned officer was not aware of the prices prevailing in the international market and has fixed the tariff value without any base reference. ?We would like to know that what formula is being adopted by the department to fix the tariff price of brass scrap for the purpose of assessing revenue. There is lot of discrepancy as even the price of prime or virgin copper at the international market is around $3,000 per tonne,? he said.
?If such circumstances continue to prevail, most of the units will be left with no other option but to shut down their units. There are about 50,000 units all over the country, mainly in Gujarat, UP and Maharashtra,? he said.