Goyal moots idea of border adjustment tax; suggests discussion with steel industry

New Delhi, Sep 05: Commerce and Industry Minister Piyush Goyal on Thursday mooted the idea of introduction of border adjustment tax and suggested discussions on this with the steel industry with a view to protect the domestic players by providing a level-playing field against increasing imports.

He said that this tax is in compliance with the World Trade Organisation (WTO).

The idea assumes significance as the industry is seeking protection from imports at predatory prices.

Goyal also asked the industry to target 500 million tonnes of steel production in the next 10 years. At present, the industry is eyeing 300 million tonnes of output by 2030.

The minister suggested the industry find newer and better ways on lowering carbon emissions and promoting high productivity and quality steel in the country.

"Let's try and utilise AI (artificial intelligence) to optimise our production, reduce waste, and improve efficiency across the value chain and work towards a circle economy in a bigger way," he said, while addressing a steel conclave virtually.

He suggested that 4-5 top leaders of the steel industry can sit with him on this important subject for deliberations.

The minister added that the government was not able to extend the benefits of the Remission of Duties and Taxes on Exported Products (RoDTEP) Scheme to the sector due to a shortage of funds.

"I think there's another very important subject that I have made a lot of effort on in the past but sadly could not succeed. Let's make one more effort. On the Border Adjustment Tax, electricity duty, iron ore duties, when you are exporting steel, we are loaded with these taxes," he said.

Goyal said that imported steel which comes into India doesn't have to pay all these taxes.

"Border Adjustment Tax is a WTO-compliant mechanism, which if all the industries -- CII, FICCI, Assocham -- everyone take out, we may be in a position to get traction and get it also into the country," he said.

"Imports, even from FTA (free trade agreement) countries at least, will be alluded with the similar electricity duty, coal cess, any additional state levies or taxes that you're not getting remitted, which are not being charged in other countries, can be adjusted through a border adjustment tax. So let 4-5 of us sit down...and take this dialogue forward," Goyal added.

His statement was in response to ISA president Navin Jindal's concerns on the steel industry needing support and protection from imports happening into India at predatory prices from FTA countries.