Mining sector seeks lower tax, export duty exemptions
The Federation of Indian Mineral Industries (FIMI) has sought rationalisation of tax on mining, and exemption from export duties on iron ore and bauxite.
In a press statement before its 52nd Annual General Meeting, the industry body said taxes and royalty for mining in India are the highest in the world.
“Effective Tax Rates (ETRs) work out to be as high as 64 per cent for the existing mines and 60 per cent for the auctioned mines. Apart from the ETRs, there are hosts of other taxes, levies and cess due to which total financial burden goes beyond 100 per cent of the cost of mineral production,” the statement said.
“There is, therefore, a need to rationalise the taxation structure for the mining sector for sustainable development and deriving long term benefits in terms of sustained raw material security,” the statement added.
FIMI also called for a reduction of export duty on iron ore. The statement said, “Since there is no domestic demand for iron ore with up to 62 per cent iron (Fe), the only alternative is to export. The export duty on more than 58 per cent Fe grade is 30 per cent ad valorem which makes exports unviable. Hence, FIMI reiterates that export duty on iron ore up to 62 per cent Fe should be removed completely, particularly iron ore of Jharkhand and Odisha.”
FIMI also said an export duty of 15 per cent is charged on bauxite. “A number of small bauxite mines in the State of Gujarat and Maharashtra have been closed or are operating at very low capacities. The quantum of exports of bauxite which had peaked to 8.91 million tonne during 2015-2016 has now sharply declined to about 1.5 million tonne. Considering that this low grade of bauxite is not suitable for the domestic aluminium industry, it would be prudent that we encourage the exports of such bauxite by removing the export duty,” the statement said.
Source: THE HINDU BUSINESSLINE