Industry seeks SEZ-like tax sops for steel

DATELINE

NEW DELHI, MAR 27: Industry body CII has sought higher banking exposure
norms for lending to steel projects and infrastructure status to the
steel industry, besides tax sops on par with special economic zones to
boost the sector.
"The government should consider steel industry as a priority industry
and provide appropriate fiscal incentives which are provided to other
priority sector industries," CII said in a paper submitted to the
government.

The industry body demanded enhancing sectoral exposure limits of banks
and financial institutions from 10 and 15 % to 25 %, besides
infrastructure status to the steel industry similar to power sector.

It also suggested setting up a Special Purpose Vehicle -Steel Finance
Corporation of India (SFCI) as a public-private partnership entity for
the sector. CII suggested that integrated steel plants with a capacity
of minimum two million tonnes be allowed to determine their own rate of
depreciation while duty on project imports for greenfield and brownfield
expansions for steel projects be brought down to zero in the next 15
years.The chamber sought relaxations on restrictions for end use of
External Commercial Borrowings for steel firms to enable them retire
rupee debt and raise project finance.

"Interest limit on raising ECBs may be relaxed to at least LIBOR plus
5.5 on floating rate from the current rate of LIBOR 5.5 per annum," CII
suggested in the paper.

The industry body also demanded that securitisation of export
receivables be made free from all restrictions.

"Main EPC contractor for setting up steel plant should get benefits
available to a developer as provided in the SEZ Act," the industry body
demanded strongly.

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