Customs - Import of Steel - Quality Compromised?
THE CBEC has received representations that imports of steel products are being allowed without compliance of mandatory Indian Standards stipulated i.e. IS :2062 , IS:2002, IS: 2041, IS: 277 and IS: 1786 in the Steel and Steel Products (Quality Control) Second Order, 2012. Reportedly this is being done even after the notification of the Steel and Steel Products (Quality Control) Second (2 nd Amendment) Order, 2014 with effect from 04.12.2014.
The Board desires that the import of Steel and Steel Products in contravention of the Steel and Steel Products (Quality Control) Order, should not be allowed. Chief Commissioners of Customs are advised to suitably instruct officers and staff in their jurisdiction that provisions of the Steel and Steel Products (Quality Control) Order are strictly complied with and import of sub standard and steel products in contravention of the Orders are not permitted.
Indian Steel Industry is facing a huge crisis because of cheap and low quality import of steel. More than 8 million tons of steel has been imported this Financial Year. Recently the TATA Steel MD is reported to have said that Indian steel industry is struggling because a lot of cheap imports are coming in, including from China, and they have approached the government.
On 11th March 2015, to a question whether Government is contemplating to put ban on the import of Chinese steel to give respite to steel producers of India, the Minister of State for Steel Mr. Vishnu Deo Sai replied in the Rajya Sabha,
"No, Sir. However, the Government ensures that only quality steel is imported into India in terms of steel and Steel Product (Quality Control) Orders on 12-03-2012, as last amended on 04-12-2014."
The same minister answered another related question in the Rajya Sabha on 18.03.2015. The question was:
Will the Minister of STEEL be pleased to state:-
(a) whether the sharp increase in import of steel is hurting the domestic steel manufacturing sector and could cost hundreds of jobs;
(b) whether Government proposes to impose higher import duty and put in place anti-dumping measure to stem the sharp surge in steel imports;
(c) if so, the details thereof
(d) if not, the reasons therefor?
The Minister replied:
a. There have been representations from the various quarters regarding increased import of steel products in the country.
(b)to(d): The Government has raised the tariff rate of import duty on iron and steel goods covered under Chapter 72 and Chapter 73 of HS Classification, from 10% to 15% ad valorem. The Directorate General of Anti-Dumping & Allied Duties (DGAD) conducts anti-dumping investigations on the basis of a duly substantiated petition filed by the domestic industry alleging dumping of goods into the country causing injury to the domestic industry. Presently three Measures are in force on Stainless Steel products i.e. Cold Rolled flat products of Stainless Steel, Certain Hot Rolled flat products of Stainless Steel and Stainless Steel Cold Rolled Flat products of 400 series having width below 600 mm.
The Hon'ble Minister has told the Parliament that the Government has raised the tariff rate of import duty on iron and steel goods from 10% to 15% ad valorem. His officers have not perhaps told him that raising the tariff rate does not in any way effect the effective rate of duty. The Government has not changed the effective rate and so effectively nothing has been done, but Parliament has been told solemnly that the tariff rate has been raised - and this is very much true! This is how the babus take the ministers and Parliament for a ride.
Obviously unaware of all this, the Customs has been perhaps merrily allowing import of cheap low quality steel.
Let us hope the Board instructions do reach the Customs formations and they bother to implement them.
CBEC Circular No.8/2015- Cus., Dated: March 24, 2015