New Delhi: Ahead of the Budget, the Indian forging industry on Tuesday asked the government to ban export of higher grade iron ore and roll back excise duty and service tax rates to 8 percent to facilitate growth of the sector.
Seeking help to ensure reasonable pricing of inputs such as costs of fuels, power and labour, Association of Indian Forging Industry (AIFI) said intervention from the government was required to give the sector a competitive edge, which is imperative to compete effectively in global markets.
"The Indian forging industry has kept abreast with the domestic manufacturing sector's demand, yet exporting significant quantities despite surging input costs of fuels, power and labour charges during the past months of the financial year," AIFI said in a statement.
Asking the government to promote value added products, the industry body said export of higher grade iron ore must be banned, if not all iron ore grades.
Justifying the demand, AIFI said: "Our steel prices need to match with international prices, especially China's, for which steel companies should not have the excuse of adequate right quality iron ore availability at reasonable rate within the country."
Besides, the forging industry loses on export orders due to higher Indian steel prices compared to others, it added.
AIFI further said excise duty and service tax rates, which were increased in the last two Budgets from 8 percent to 12 percent, need to be rolled back.
"The industrial growth has significantly fallen. Due to low capital investment and high inflation, the demand for indigenous goods and services is affected adversely," it said.
While seeking implementation GST, AIFI said in view of the delay in bringing of the uniform single point taxation, the government must reduce CST to one from two percent.
It also said MAT (Minimum Alternate Tax) rate should be lowered to 10 percent from the present 18.5 percent as "it adversely affects the MAT paying companies, particularly the manufacturing companies".
AIFI also asked the government to create a 'Technology Up Gradation Fund' to help the sector and also sought removal of surcharge as well as education cess on Corporate assessees.
"The surcharges, including the education cess were levied only as a temporary measure," it said.
It also said corporate tax must be brought, at least, to the levels of south East Asian countries such as China, 25 percent, Malaysia (25 percent), Singapore 18 percent, Hong Kong 17.5 percent to creating a level playing field for the Indian industry while competing with these countries.