Regulatory duty on steel products import likely

ISLAMABAD - Federal Board of Revenue might impose regulatory duty on the import of steel products in the upcoming budget for the next financial year 2009-10 in order to control its imports in order to protect the local industry.
Sources in the tax machinery told TheNation that FBR was actively considering the proposal that to protect the local industry it should enforce 10 to 15 per cent regulatory duty on the imports of steel products and in this regard they had received the recommendations from Ministry of Industries and Production.
Pakistan Steel Mill has faced a deficit of Rs 15 billion in the current year and the authorities wanted to give some relief to the governments owned steel producers for which Ministry of Industries and Production had proposed 10-15 per cent duty on the import of steel products, the sources said.
Pakistan Steel Mill was facing loss due to low sale in the domestic market as the developmental projects were halted which reduced its sales. PSMC submitted the recommendations to the Ministry to impose duty on the import of steel, the source further said.
Talking to TheNation various economists said that the government should impose the duty on the different products of steel as our neighbouring country India in its budget had also imposed duty on the steel products.
The products were being dumped into India below their normal value and their industry was suffering because of the import of stainless steel products.
They are of the view that sales of the countrys largest steel producer have been badly affected due to the depleting price trend in the international market, as PSM made contracts of raw materials at higher prices in April 2008 and its products are now more costly than the international market.
It is pertinent to mention here that due to decreasing trend in raw material prices and a halt in construction activities, the demand for local steel had been pushed down which forced the Pakistan Steel Mill to bring down prices of different products a few days back.
The regulatory duty on the import of steel would help PSM to cope up with its declining sales in the local market.