Aluminium industry seeks incentive under RODTEP scheme

By: |
March 4, 2021 5:02 PM

In India, the high incidence of numerous unrebated central anbd state taxes/ duties impede the growth potential of aluminium sector. Various taxes constitute 15 per cent of the aluminium production cost which is amongst highest in the world.

This has resulted in blockage of significant funds for the already stressed non-ferrous metal sector exporters, it said.This has resulted in blockage of significant funds for the already stressed non-ferrous metal sector exporters, it said.

The Aluminium Association of India (AAI) on Thursday urged the government to provide support by notifying at least five per cent remission rate for the sector under tax refund scheme RoDTEP to boost exports.

Giving relief to exporters, the government has decided to extend the benefit of tax refund scheme RoDTEP to all goods with effect from January 1, 2021.

In March last year, the government approved the scheme for Remission of Duties and Taxes on Exported Products (RoDTEP) for reimbursement of taxes and duties to exporters, with a view to give a boost to the country’s dwindling outbound shipments.

“The aluminium industry seeks immediate support for notifying at least five per cent remission rate for aluminium sector under RoDTEP scheme,” Aluminium Assocation of India (AAI) said in a representation to the government.

However, the pendency of notifying the sector-wise remission rates under RoDTEP scheme is creating a precarious situation and uncertainty for Indian exporters due to ambiguity with regard to pricing of goods and thereby impacting Indian exports, it noted.

The situation for exporters has been further aggravated due to withdrawal of Merchandise Export from India Scheme and till date, exporters are unable to avail the MEIS benefit for exports already made during FY’20 and FY’21 (April to December) due to blocking of online MEIS module for applying for claims.

This has resulted in blockage of significant funds for the already stressed non-ferrous metal sector exporters, it said.

In the absence of any export incentives/ remission mechanism, the aluminium exports are struggling to remain globally competitive as compared to the major exporting countries, especially China, which extends various support measures for export competitiveness.

In India, the high incidence of numerous unrebated central anbd state taxes/ duties impede the growth potential of aluminium sector. Various taxes constitute 15 per cent of the aluminium production cost which is amongst highest in the world.

This adversely impacts the sustainability and competitiveness of aluminium industry and further renders Indian exporters vulnerable and uncompetitive vis–vis global players in international markets, as per the grouping.

“These duties and taxes should not be exported as such and should be remitted back to encourage domestic value addition and export of finished products,” it said.

As per the association, under the MEIS, the aluminium exports were eligible for a two per cent reward rate which itself does not provide ample cushion to remain competitive against current bearish market conditions.

“The government support is extremely crucial at this juncture to reduce burden of taxes/ levies with least five per cent remission rate under RoDTEP to boost exports and survive this challenging phase,” it said.

AAI is the apex body representing the entire spectrum of Indian aluminium industry, including primary producers and downstream, according to its website.

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