Meeting on ''steel industry crisis'' on June 18

Ministry of Industries and Production has convened a steel stakeholders'' meeting on June 18 to discuss post-budget increase in prices, sources told Business Recorder on Wednesday. Sources said that industry was facing a crisis as the budget had resulted in five percent further increase on steel products'' prices.
Such an increase, the sources added, was never anticipated by the industry or the Engineering Development Board (EDB). The proposal was made by the Central Board of Revenue. An EDB official said they had proposed to the CBR and government to continue with the status quo in steel sector.
Sources in the industry said that the increase would go beyond Rs 4,000 per ton as the government had also withdrawn the deemed value it had fixed for tax on imported billets and scrap in the budget. These items would now be taxed on actual invoice rather than the deemed value.
The government had fixed deemed value of imported billets at Rs 22,000 per ton for tax whereas its actual price in the international market was ranging between Rs 32,000 and Rs 35,000.
"What was the point of negotiating with the industry and arranging tele-conferences if the government was not willing to consider our proposals," said an industry representative, adding that the increase in prices would also escalate the cost of government-funded mega development projects.
Another representative said the industry had to pass on sale tax and deemed value to the consumer. "We will ask the government to implement the increase from July 1 instead of June in order to work out the impact to be passed on to the consumer," he added.
It was learnt that the industry had also proposed to the government to identify domestic iron ore and coal reserves and leased these exclusively to steel making units. The government was also requested to encourage development of local iron ore based steel industry.
Currently, the industry faces 0 percent duty on scraps, 5 percent on billets and 10 percent steel on bars (finished products) and 15 percent sales tax across the board, which was increased up to 20 percent in the budget.