Aluminium association urges government to remit export duties and taxes under RoDTEP scheme

Jun 27,2020

Aluminium Association of India (AAI) has approached the ministry of finance and the ministry of commerce and Industry to implement remission of duties or taxes on export products (RoDTEP) scheme, a move aimed to compete and substitute Chinese aluminium exports to major economies in the world.

In a letter dated 24th June AAI said, “These duties and taxes should not be exported as such and should be remitted back to the domestic producers to encourage domestic value addition and export of finished products.”

The body has requested the ministries to ensure remission of unrebated central & state duties & taxes which constitutes around 15 per cent of aluminium production cost and to enhance benefit under merchandise exports from India scheme (MEIS) from current 2 to 5 per cent for all aluminium products till remission of duties or taxes on export products is implemented.

The cabinet approved remission of duties or taxes on export products scheme on 13th March 2020. Under the scheme, an inter-ministerial committee will be set up to determine the rates and items for which the reimbursement of taxes and duties would be provided.

The sequence of introduction of the scheme across sectors, prioritization of the sectors to be covered, degree of benefit to be given on various items within the rates set by the committee will be decided and notified by the Department of Commerce (DoC).

Data from the report by Aluminium Association of India shows that aluminium exports have contributed $ 5.7 billion to India’s Forex earning in FY-19, i.e. 1.7 per cent of total Indian exports ($330 billion).

“To enhance exports and double Forex earnings to the tune of around $10 billion it is imperative to support the industry with adequate remission of unrebated duties and taxes under the Remission of Duties or Taxes on Export Products Scheme as a priority Sector,” the aluminium body said in a letter.

As per the Aluminium Association of India’s letter, the large aluminium producing countries like China, by way of various incentives and subsidies for raw materials, tax benefits, export tax incentives have better cost competitiveness.

“On the other hand, the Indian Aluminium industry is struggling with the incidence of the huge burden of unrebated central & state taxes and duties, constituting around 15 per cent of Aluminium production cost,” the letter said.

Latest News