Citizens’ Research Collective on SEZ

Dilip Bisoi, The Financial Express

Bhubaneswar, June 24, 2007: The Centre has levied an export duty of Rs 300 per tonne on iron ore and Rs 1,000 on chrome ore. But, there is no clarity yet on whether the duty will be levied on iron and chrome ore destined for units in the Special Economic Zones. “I am not aware of it”, minister of state for commerce, Jairam Ramesh, told FE.

SEZs are considered to be foreign land. Therefore, raw material destined for these zones should be considered as export, say some observers.

The issue is troubling Posco-India and Jindal Stainless, who are locating projects in SEZs. Posco-India’s 12 m.t steel project has got in-principle approval for an SEZ and Jindal’s stainless steel project has formal approval. While both will use iron ore, Jindal will also use chrome ore.

Posco-India chairman-cum-managing director, Soung-Sik Cho, is not sure whether export duty would be levied on ore used in SEZs. “I am of the impression that the duty would not be levied on iron ore meant for Posco-India project as the company would use the raw material from its own captive mines.” He, however, added that “further clarification is required”.

Ramesh, who was on a two-day visit here last week, told the media that the Centre was considering the proposal to transfer a portion of the revenue collected from the export duty on iron ore and chrome ore.