The Aluminium Association of India has urged the government to implementation the RoDTEP Scheme (Remission of Duties or Taxes on Export Products) for the Indian Aluminium industry on priority to survive these challenging times.
In a letter to senior officials of ministries of Commerce and Industry and Finance and Corporate Affairs, the association has expressed the urgent need for at least 5 percent remission rate for the Aluminium sector under RoDTEP Scheme.
The AAI also requested a separate budget allocation for the aluminium industry, being a strategic sector, to double Aluminium exports over the next 2-3 years.
The Government needs to notify the actual remission rates as per actual sectoral data submitted to the RoDTEP Committee.
The inordinate delay in notifying the sector-wise remission rates is creating a precarious situation and a high level of uncertainty for the Indian exporters, it added.
The situation for exporters further aggravates with the withdrawal of MEIS (Merchandise Exports from India Scheme), as to date the exporters are unable to avail the MEIS benefit for exports already made during FY’20 and FY’21 (Apr-Dec) due to the blocking of the online MEIS module for applying claims, it said.
The Union Budget 2021-22 has allocated only ₹13,000 crore for RoDTEP Scheme against ₹50,000 crore announced by the Finance Minister in September, 2019. This allocation is just one-third of the ₹39,097 crore allocated in FY’20 for MEIS.
The high incidence of numerous unrebated Central and State taxes and duties impedes the growth potential of Aluminium sector in India, said AAI. The various taxes constitute 15 percent of Aluminium production cost which is amongst highest in the world.
Under MEIS, the aluminium exports were eligible for a 2 percent reward rate which itself did not provide ample cushion to remain competitive against the current bearish market condition, said AAI.
Aluminium exports alone contributed $5 billion to India’s forex earning in FY’21, almost 2 percent of India’s export basket and have massive potential to double the exports to the tune of $10 billion in future.