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Non-ferrous
Metals
Highlights
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No change in excise duty structure, customs surcharge
abolished
| Budget
Impact |
| Excise |
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Customs |
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Policy
Tax |
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The excise
duty structure pertaining to the non-ferrous industry has
been left unchanged.
The
reduction in customs duty could marginally benefit companies
like Indo Gulf, Sterlite and Indal, which have a high import
component. On the other hand, imports of finished products
will be a wee bit cheaper.
All
companies will benefit from the cut in the corporate tax
surcharge and the cut in dividend tax.
Outlook
Closure of units in the USA coupled with a fall in international
inventory has helped improve prospects of the Indian aluminium
industry. While demand from several regions such as the
Eastern Block, Asia and China has been improving in the
past three years, the shutting down of capacities in the
USA (California), a result of a power crisis there, is expected
to contribute to a substantial deficit in global aluminium
supply in the current calendar year, a fact which could
trigger price increases. Also additional capacities will
take some time to spring up. The only reason for apprehension
could be the Russian aluminium supplies. The prices of aluminium
internationally had started to improve from February onwards
by more than 15 % in the current fiscal (from $1510/tonne
to $1737/tonne).
International
copper prices have improved by 5% this fiscal. Industry
had been expecting the customs duty of copper concentrates
to be reduced from the current 5 % to 3 % or even zero %.
This is because reducing the customs duty will help the
domestic industry to compete better in a scenario when countries
like China have a zero % import duty on copper concentrate.
In the case of zinc, international prices have been falling.
For example the prices of zinc fell by close to 5 % in the
current fiscal.
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Voices
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The
budget has been good on all fronts. The budget is excellent
for the aluminium industry. This is because while not
much has been done on the excise front, customs surcharge
has been removed. This will enable us to import raw
materials at a cheaper rate.
Anil
Jhala-Jt. President Treasury & Company Secretary-Hindalco
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