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Extra excise burden to affect steel merchants

Our Bureau

BANGALORE, Nov. 9

SERVICE units that carry out the exercise of cutting steel sheets to the requirements of their customers have sought reconsideration of the decision asking them to bear a levy of 16 per cent. The plea made by the Bangalore Iron, Steel and Hardware Mercha nts' Association has said that the recent notification by the Excise Department introducing this new levy has affected many of the service units, as it amounted to forcing the cutting units to pay ``excise on excise''.

The association has pointed out that the units which undertake the cutting jobs are supplied the steel sheets by traders and industries to get the sheet coming in coil form to be cut to their requirement. As per the Excise Department's notification of Se ptember 7, the cutters are forced to pay 16 per cent duty on the landed value of the goods they have received from their customers, which include freight, duty paid on the basic value and local sales taxes.

As the cutting job is not a manufacturing activity, service units are surprised at the excise levy, which while increasing the cost of the products by Rs 3,500 per tonne, will affect their business.

In the highly competitive market, if the steel manufacturer has to pay excise twice, it will only further aggravate difficulties of the steel industry already suffering from the vagaries of the market conditions, said Mr Syed Masood Ahmed, President of t he association.

Expressing concern at the additional burden, Mr Ahmed said about 10 units in Bangalore and 200 to 300 units doing the job work in various cities such as Mumbai, Delhi, Hyderabad and Kanpur will be badly affected by this decision.