The lobby group has urged the commerce and industry ministry for an initial 5% refund rate, subsequently going up to 12-13%, citing the high burden of unrebated taxes and duties, which are about 15% of production cost.
India’s top aluminium exports include unalloyed and alloyed aluminium ingots, billets, slabs, wire rods and plates. The country exported aluminium products worth $5.5 billion in the previous fiscal year.
The government had asked the industry to come up with refund rates for various sectors.
“The RoDTEP (Remission of Duties and Taxes on Exported Products) scheme rates will be decided after consultations among the ministries of commerce and industry, finance, respective line ministries and industry,” a government official said. Indian exporters are currently covered under the Merchandise Export from India Scheme.
“Indian exports are suffering due to the measures taken by the US to impose 10% tariffs on aluminium imports and granting exemption to Australia, Argentina, Canada and Mexico, which constitutes almost 50% of the US’ aluminium imports,” said an industry representative.
Chinese companies have cornered more than half of the global market share in aluminium due to the large subsidies given by its government, he added.
Further, with the US withdrawing the Generalized System of Preferences (GSP) benefits to India, India’s aluminium exports are now subject to an additional 2.6-6% duty over and above the 10% tariffs, while the same product from Canada, Mexico, Argentina and Australia are imported into the US at zero duty.
“Being in the government’s priority list, fast-track implementation of the RoDTEP scheme for aluminium will boost exports by reducing the burden of unrebated taxes and duties and entail global cost competitiveness in international markets,” said Rahul Sharma, president of the Aluminium Association of India.
The Union Cabinet had approved RoDTEP in March.
This is a scheme for exporters to reimburse taxes and duties paid by them, such as value added tax, coal cess, mandi tax, electricity duties and fuel used for transportation, which are not exempted or refunded under any other existing mechanism.