Budget 2017: Mines Ministry seeks hike in basic Customs duty on copper products

By: | Updated: January 19, 2017 2:13 PM

Mines ministry has sought hike in basic Customs duty on copper products to 7.5% in the upcoming Budget 2017 and restoration of export incentive of 2% on value of copper rods to maintain sectoral viability.

The source said the mines ministry has also pitched for "restoration of export incentive of 2 per cent on the value of export of copper cathode rods".The source said the mines ministry has also pitched for “restoration of export incentive of 2 per cent on the value of export of copper cathode rods”.

The mines ministry has sought hike in basic Customs duty on copper products to 7.5 per cent in the upcoming Budget 2017 and restoration of export incentive of 2 per cent on value of copper rods to maintain sectoral viability.

In a recent communication to the finance ministry, its mines counterpart has recommended for consideration in the Union budget 2017-18 “the increase in basic Customs duty on copper products like copper cathode, billets of refined copper, electrolytic copper rods, copper rods other than electrolytic and other copper wire from current 5 per cent to 7.5 per cent”, a source said.

The source said the mines ministry has also pitched for “restoration of export incentive of 2 per cent on the value of export of copper cathode rods”.

Hindustan Copper Ltd (HCL), Hindalco Industries and Vedanta are the main copper producers in the country with a combined capacity of 1 million tonne refined copper per annum.

In its pre-budget representation to the mines ministry, Indian Primary Copper Producers’ Association, among other things, had also made a plea for exemption of copper concentrate from basic Customs duty.

You may also like to watch:

Copper concentrate, the raw material of the copper industry, is limited in the country and around 96 per cent of it is imported.

“Domestic copper industry imports copper concentrate at London Metals Exchange (LME) price less internationally negotiated treatment charge and refining charges (TCRC) and sells the produce at LME price plus premium,” the source said.

“Domestic (copper) industry is facing serious challenges from countries with which India has free trade agreements (FTAs),” the source said.

Imports of wires (copper) of less than 6 mm coming under the inverted duty surged to 50,857 mt in 2015-16 from 4,802 mt in 2012-13, which is likely to increase further to 80,00 mt this year as the Customs duty under the treaty is set to become zero from this month.

The out-bound shipments under the India-Japan treaty are also coming under the inverted duty structure, which rose to 12,258 mt in 2015-16, from 461 mt in 2012-13.

The exporting countries to India are extremely competitive in copper value chain as they have their own mines, and duty concessions to these countries under FTAs have threatened the viability of Indian domestic copper industry.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Switch to Hindi Edition