The Aluminum Association of India has also requested to increase the tariff rate of Basic Custom Duty for aluminum and articles from 10 to 15%.
The domestic aluminum industry has sought reduction in basic customs duty and reverse duty structure reforms on critical raw materials including pet coke, caustic soda, aluminum fluoride and alumina to encourage cost competitiveness in the sector.
The domestic aluminum industry, represented by the Aluminum Association of India (AAI), has sought immediate government support through the upcoming Union Budget 2022-23.
It has also requested the AAI to increase the rate of basic customs duty for aluminum and articles from 10 to 15%, in line with the steel sector, as per the pre-budget requirements.
It has also been requested to increase the basic customs duty on primary aluminum from 7.5 percent to 10 percent, aluminum scrap from 2.5 percent to 10 percent and downstream aluminum products from 7.5 percent to 10 percent.
The primary aluminum industry is facing serious threat from increasing imports of aluminum and scrap.
The share of scrap in total imports increased from 52% in FY’16 to 71% in H1 of FY’22 and resulted in foreign exchange expenditure of $2 billion (₹15,000 crore) per annum.
AAI has sought increase in import duty on aluminum scrap at par with primary aluminum metal (proposed 10%) to encourage domestic recycling of indigenous scrap and promote a circular economy.
The association has sought the abolition of the high cess (₹400/metric tonne) on coal to support the power-intensive aluminum industry in reducing its burden.
There is a need to rationalize the higher coal cess to support the industry and has been recommended by various ministries and government think tanks including NITI Aayog, Ministry of Mines, Ministry of Coal and Ministry of Power.
Under the GST regime, the GST Compensation Cess on coal was to be levied only for the first five years from July 1, 2017 to July 1, 2022.
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