New Delhi, Sep 24 (KNN) The downstream aluminum industry, who are mostly the micro, small and medium enterprises (MSMEs), has urged Union Power Minister Piyush Goyal that the import of raw material should have no duty or rather minimum duty and maximum duty must be imposed on the import of finished aluminium products.

In a letter to the Minister, the Aluminium Secondary Manufacturers Association (ASMA), highlighted the key points discussed during the meeting conducted by the Mines Ministry along with the industry representatives and other stakeholder on September 19.

“Though no final decision could be taken in the meeting due to absence of consensus on various matters but the representatives who came with different data and documents submitted the same in the meeting and the undue and uncalled for demand of the primary producers was exposed,” ASME Patron Anil Agarwal wrote in the letter, a copy of which is with KNN.

The association pointed that during the meeting it came out that the primary producers are earning reasonable profits and the claim that they are incurring losses was absolutely wrong and the balance sheet declared by them duly audited were submitted in the meeting for the information of all.

“Though the percentage of profit must have gone down in the latest balance sheet but it was all due to incorporating various expenditure incurred for expansion and diversification of project including interest, depreciation etc,” the letter noted.

The cost of production of the primary producers in the country is the lowest of all, if compared worldwide, it said.

The downstream industry highlighted that the primary producers had claimed with the Director General of Safeguard that they are running their plants under 50% of their installed capacity, which was also proved to be wrong as they are running their plants on almost full capacity.

They have shown the figures of production without including the quantity of the downstream products, the letter read.

“Primary producers have done expansion in a big way (manifold) during last 2/3 years.

Moreover, in their claim of total installed capacity, they have included the capacity of new plant and machinery under installation and expansion, but full production of the same is yet to be achieved. As it is well known that new plant and machinery under expansion will take some time to come in full production but their installed capacity has been counted for total installed capacity,” ASMA said.

The primary producers have exported the metal for the year 2015-16 to the extent of about 8,00,000 MT on the international prices in comparison to the total import of about 3,00,000 MT.

“They are already enjoying about 13% premium on the entire domestic sale in comparison to international price (international price i.e. LME + premium) custom duty and all types of Cess, inland haulage charges, clearing and forwarding etc,” the letter said.

The association said that the primary producers are trying and lobbying for the last more than one year for imposing of different kind of duties on import of aluminium metal such as safeguard duty, anti dumping duty etc. but every time their “un-genuine” demands got rejected.

“When the Ministry of Commerce and Ministry of Revenue find no justification in imposing of safeguard duty and anti dumping duty they turned down their request and dropped the move.

When they failed to get unjustified benefit from these ministries, now they have approached the Ministry of Mines to get support for imposing of minimum import price (MIP) for reasons unknown to us,” said the letter which was also marked to Ministry of Commerce and the Ministry of Finance.

It was also informed in the meeting that the Government of India in the recent past i.e. in the budget for 2016-17 has already increased the import duty by 2.5% on all aluminium products, i.e. from 5% to 7.5%.

The papers were also submitted in the proof that there is no surge in the import of aluminium metal instead the import of the same has declined in OGL to almost NIL.

The only metal being imported in the country is around 3,00,000 MT that too almost total against the advance license to the exporter against their export entitlement which cannot be stopped.

“It was also offered by all the associations of the manufacturers of different items to the primary producers, if they want their monopoly and don't want the import of metal even against export license, they should assure the exporters to supply this quantity on the international prices, on which they are already exporting a quantity of about 800000 MT,” the letter pointed.

The primary producers, however, did not make any commitment for the same.

ASMA alleged that, “They are not only the primary producers but also manufacturers of several downstream aluminium products competing with MSMEs in the domestic market in the country who are facing stiff competition from the primary producers.”

By doing so (increase in duty/ MIP), they want to supply the raw material to small and medium industries on the higher prices and to compete with them on the downstream products and resulting in close down thousands of these industries, said the letter.

The letter concluded that the duty on the metal would not only lead to closure of several units but also in layoff of thousands of workers. (KNN Bureau)