iron and steel : strengthening india - welcome to | … melting scrap and coking coal,...

of 20 13th

Issue Steel Re Rolling Mills Association of India visit www.srma.co.in

SRMA STEEL NEWS

SRMA

Steel Re Rolling Mills

Association of India www.sram.co.in

Steel Re-Rolling Mills Association of India www.srma.co.in Email : [email protected]

Sl. No, Name

1. Shri B.M. Beriwala,

Chairman

2. Shri Jagmel Singh Matharoo,

Vice Chairman

3. Shri Ramesh Kumar Jain,

Treasurer

4. Shri Sanjay Jain

5. Shri Kailasj Goel

6. Shri G P Agarwal

7. Shri S K Sharda

8. Shri Sandip Kumar Agarwal

9. Shri S. S. Sanganeria

10. Shri Sanjay Surekha

11. Shri R P Agarwal

12. Shri S. S. Bagaria

13. Shri Girish Agarwal

14. Shri Goutam Khanna

15. Shri Suresh Bansal

16. Shri Rajiv Jajodia

17. Shri Bhusan Agarwal

18. Shri Mahesh Agarwal

19. Shri Sita Ram Gupta

20. Shri Ashok Bardeja

http://www.srma.co.in/

mailto:[email protected]

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Executive Summary

Survival of the Indian Sponge Iron Industry : Issues &

Recommendations

Raw Material Challenges in Indian Steel Industry

Environment & Safety Focus : Steel Industry

Labour & Legal News

Taxation News

Event & Latest Steel News

CONTENTS

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Steel production of India is estimated to be around 100 million tonnes (MT) in 2013 and the production is expected

to reach 275 MT by 2020. The per capita steel consumption increased from 34 kilograms (kg) in 2004-05 to 59 kg in

2011-12. The World Steel Association has estimated steel consumption in India to grow at five per cent in 2013.

Steel producers may see a spurt in demand in the

medium term if the Indian Government

implements its US$ 1 trillion infrastructure

investment plan. India's steel-making capacity is

slated to cross 100 MT in 2013 which will require

about 160-170 MT of iron ore.

The steel industry is expected to add 12.8 MT of

capacity in the second half of 2012-13, with the

major contributors identified as SAIL, RINL,

Bhushan Steel and Jindal Steel. Indian crude steel

production is estimated to grow at a compound

annual growth rate (CAGR) of around 10 per cent

during 2010-2013, whereas the finished steel

consumption is estimated to grow at a CAGR of

around 12 per cent during FY 2012-14

The Indian steel sector is contributing to nearly 2% of the GDP (Gross Domestic Product) and employed over 5 lakh

people., Steel Ministry said in the year end review report. According to the statement, India became the 4th largest

producer of crude steel in the world in 2010 as against the 8th position in 2003 and is expected to become the 2th

largest producer of crude steel in the world by 2015. Going by estimate of Rs.4,000 crore investment per million

tonne of additional capacity, intended steel capacity build up in the country is likely to result in an investment of

Rs.8,70,640 crore by 2020.

Supporting R&D in Steel Sector - In order to encourage R&D activities in iron and steel sector, Ministry of Steel

is providing financial assistance under the following two schemes: Financial assistance from Steel Development

Fund (SDF) under the mechanism of Empowered Committee (EC) 68 R&D projects have been approved costing Rs.

544.34 crore with SDF assistance of Rs. 263.48 crore. So far Ministry of Steel has released Rs. 145.63 crore from

Steel Development Fund (SDF). Out of 68 R&D projects, 35 projects have been completed yielding benefits to the

industries, 9 projects have been stopped after midterm review and 24 projects are in progress.

Demand of Steel - The Ministry has initiated a study to assess the steel demand in the rural areas of the country and

to examine the potential of increasing the level of steel consumption. The study would cover 300 districts, 1500

villages, 4500 manufactures and 8000 retailers spread over all the 35 states and union territories of the country.

Production, consumption and demand of Steel In the next five years, demand of steel is likely to grow at a higher

annual average growth of over 11-12% as compared to the average annual growth of 8% achieved between 1991-92

and 2010-11.

Capability for crude steel production expanded from 51.17 million tonnes per annum (mtpa) in 2005-06 to 78 mtpa

in 2010-11. Crude steel production grew at 8% annually (CAGR) from 46.46 million tonnes in 2005-06 to 69.57

million tonnes in 2010-11. Production for sale of finished steel stood at 66.01 million tonnes during 2010-11 as

against 46.57 million tonnes in 2005-06, an average annual (CAGR) growth of 7%. Consumption of finished steel

has grown at a CAGR of 9.6 % during the last six years. Export of finished steel during 2010-11 stood at 3.36

million tonnes while imports during 2010-11 stood at 6.54 million tonnes.

Size of the

Industry Nearly 46.575 million tonnes

Geographical

distribution

Odisha, West Bengal, Chattisgarh,

Tamil Nadu, Chota Nagpur,

Vishakaptnam, Madhya Pradesh, Bihar.

Output per annum 28.3 million tonnes

Market

capitalization 5% of share

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Realizing the likely role to be played by the sponge iorn industry in

future, Government of India delicensed this industry way back in

1985 much before the delicensing and opening up of the Indian

economy in 1991. At that time India’s second largest import (after

crude oil) was steel melting scrap. It was considered essential at that

time to develop this industry to meet the likely demand of steel in the

country and to reduce the dependence on imported raw materials like

steel melting scrap and coking coal, Government’s efforts led setting

up of a few coal based and gas based sponge iron plants in the

country.

From 2003, coal based sponge iron route dominated because of limited availability of natural gas and fast growing

demand of metallics. In fact, no gas based sponge iron/HBI plant came up after 1994. During the period of 2003-

2008, there has been musroom growth old caol based sponge iron plants mainly in Chhattisgarh, Odisha and

Karnataka. Rapid growth of sponge iorn industry was fuelled due to rise in steel paking capacity through IF / EAF

route to meet the fast growing demand of steel in the country, high price of steel melting scarp and its restricted

availability.

Eventually, with the continuous support of the government and with Indian entrepreneurship India emerged as the

largest sponge iron producer in the world. We are occupying this position for last 11 consecutive years. Presently,

India contributes about 25% of global sponge iron production.

However, from 2009 onwards there is almost stagnation in the sponge iron industry due to several reasons like de-

acceleration in the steel demand, restricted availablity of vital inputs like iron ore, non coking coal, natural gas and

environmental related issues. For last three years sponge iron production in India is continuously declining because

of various reasons. Today, industry has come to the point where it is struggling for its very survival

Issue impacting the industry - Presently, this important segment of Indian steel industry is passing through its

worst crisis following are the main issues and recommendations essential for the survival of the Indian sponge iron

industry.

1. Iron Ore - Present technologies in operation require high grade iron ore which is available in the mines of NMDC

in Chhattisgarh and the iron ore mines in Odisha. All the three gas based sponge iron producers and Chhattisgarh

based producers are highly dependent on NMDC sources. Apart from this, Karnataka based sponge iorn producers

are also heavily dependent on NMDC sources. It is a matter of concern that NMDC is not able to meet the iron ore

demand for this sector. Caol based sponge iron producers situated in Odisha are also facing shortage of iron ore

which is likely to be further aggravagted due to mining cap being considered by the state government. It is

understood that NMDC is contemplating to increase iron ore mining capacity in Chhattisgarh. However, evacuation

of mined iron ore is going to be a great problem in view of several constraints even now faced by them.

Recommendations -Capping of iron ore mining in the state of Odisha only be done keeping in view of the present

and future requirements for iron & Steel industry.

i. NMDC should immediately take following short term & long term measures :

a. Material handling and transport equipments at the pithead should be renovated and upgraded

b. KK railway line, which is a main source for transporting iron ore, should be doubled with the

equity participation of Indian Railways, NMDC and other state holders.

c. Vizag port facilities not only should be renovated but also expanded to meet the likely additional

traffic

http://www.indiacsr.in/en/wp-content/uploads/2011/12/CSR-confernece-in-India-by-indiacsr.png

http://www.indiacsr.in/en/wp-content/uploads/2011/12/CSR-confernece-in-India-by-indiacsr.png

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d. To ease the demand of lump ore, iron ore pellet industry should be encouraged not only by the

Government of India but also by the Indian Railways and State Governments

2. Non cocking coal - Inadequate availability of non coking coal in terms of quantity and quality is the major

concern of this sector. Against annual requirement of 20-25 million tonnes, coal based sponge iron producers are

hardly getting 7-8 tonnes from CIL sources. Rest of requirement they are meeting from open market sources and

through e-auctions. Some producers are also importing non coking coal but imported coal is too costly to afford

specially by smaller and land locked units. A few units are also sourceing from their captive coal mines.

Presently this sector comes under the category of non core sector and gets differential treatment from the CIL. CIL

has a different supply and pricing policies for powr utilities & fertilizer units and defence and non core sectors like

iron & steel industry, cement industry, captive power producers (CPP) etc.

i. On a supply side, CIL should honour the New Coal Distribution Policy (NCDP) which envisages

100% supply of the coal requirement of the core sector consumers (power utilities, fertilizer units &

defence) and 75% of the normative requirement of th non core sectors like sponge iron.

ii. Conditions of Fuel Supply Agreement (FSA) should not be one sided (in favour of CIL) and there

should be parity in the FSA conditions among the core and non core sectors.

3. Natural gas - Inadequate availability of natural gas is seriously affecting the financial performance of all the three

gas based producers. Against the total requirement of 7.64 mmscmd, APM gas allocation is 5.36 mmscmd. Against

this allocation, present availability is hardly 15% - 20% of the requirement. Gas based producers are unable to meet

full requirement from import of LNG as imported LNG is 3 times costlier.

Recommendation - Inadequate supply of natural gas from domestic sources is severally impacting the functioning

of three gas based sponge iron producers. Ministry of Petroleum & Natural Gas should ensure that these units get the

natural gas as per their contractual obligations and gas based sponge iron sector should be treated at par with the

other consumers like power, fertilizer in view of the huge investment made by these units based on the assured

supply of natural gas the Government.

4. Import of DRI/HBI - Imports of DRI/HBI are increase at an alarming rate. Major source of imports are Omen,

Saudi Arabia, UAE Russia. What is alarming is the recent trend of dumping of gas based DRI / HBI much below

the prevailing price of even coal based sponge iron. As per our information, majority of the sponge iron/DRI is

coming from the Iran via UAE probably due to sanctions imposed on Iran by USA and EU. The import of sponge

iron / DRI from Iran was about 45000 metric tonnes in 2012-13 which has increased to 100,000 metric tonnes up to

Nov’13 in the current financial year. This is an increase of 122% in the eight months of the current financial year

compared to the entire financial year of last year.

Recommendations - Presently, there is a basic customs duty of 5% on the import of DRI/HBI. In order to safeguard

the interest of the struggling Indian sponge iron industry this should be increased to 10%

5. Technology limitations - As is commonly known Indian iron ores have inherent high phosphorus. Presently used sponge iron

manufacturing technologies are not equipped to reduce the phosphorus content of the iron ores. Secondly, quality of the iron ore

and non cocking coal from the domestic sources are deteriorating day by day. This lead to higher processing coat to the medium and large producers and higher carbon footprints by the small producers.

Recommendations - Ministry of Steel should encourage R&D efforts to gainfully utilize the inferior grades of the vital raw

materials like iron ore and coal.

i. Steel producers through the Induction Furnace Route should be motivated to set up ladle refining facilities to

reduce the phosphorus content.

ii. Emerging sponge iron production technologies like Hismelt, Fastment etc should be encouraged by the Government.

Source JPC

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The Government’s effort to ease the supply of coal and iron ore will help brighten prospects for steel companies in

the coming year. Though the Supreme Court has lifted the mining ban on category ‘A’ mines in Karnataka, the

production ramp-up is very slow, said sources in the industry. Moreoer, the proposals to open up production in

category ‘B’ mines continue to be stuck, awaiting approval from the Government.

The complete ban on iron ore mining in Goa has not only hit the steel industry, but also the State Government’s

revenue. Apart from tourism, the mining industry is considered a

money spinner for the Goa Government. The ban on mining in Goa

and Karnataka has resulted in job loss for about 1,00,000 people,

sources said.

Steel companies in Karnataka continue to suffer due to the shortage

of iron ore, as production at category ‘B’ mines was delayed. The

quality of iron ore currently sourced from other States is also an

issue. Production cost has gone up substantially due to the poor

quality of iron ore.

DEMAND OUTLOOK - The recent economic slowdown has cast a

gloom on the demand front, even as steel companies are fighting to secure their raw material needs. Steel

consumption in the first 11 months of the year registered a growth of a mere 1.8 per cent. In fact, demand has

slowed down since the last fiscal, when it grew just 3.3 per cent to 73.3 million tonnes. Incidentally, in the case of

automobile sector, which is a key indicator of steel demand.

Industry observers said the revival of steel demand depends on the procurement from sectors such as automobile,

real estate and construction. There appears to be no immediate recovery in key steel consuming sectors, going by the

1.2 per cent growth in the Index of Industrial Production between April and October, with October recording a fall

of 1.8 per cent in growth. India is presently in the fourth position with 71 million tonnes (mt) and China in the first

with more than 600 mt per annum. It will be a creditable achievement for India to get into the second slot. Big

challenge was to find raw material for enhanced capacities and upgrade infrastructure for production and

consumption of the steel in the domestic market as well as for exports.

The significant acceleration in growth of steel production over the past decade has led to sharp increases in demand

for raw materials – notably iron ore, coal, coke, steel scrap and various alloying elements – and producers of these

raw materials have taken steps to increase their supplies and invest in new projects. However, raw material

investments require time and significant financial investment. In addition, many miners and other raw material

suppliers simply did not expect the sharp acceleration in steel production growth that began in the early 2000s, and

thus their response to demand growth was delayed. As a result, the opening of new mines and expansions to

existing mines lagged developments in demand, creating significant market imbalances that resulted in sharp

increases in raw material prices and concerns about supply availability. However, these high prices have spurred a

boom in mining activity and investment, and many new projects are expected to come on stream in the coming

years.

The steelmaking process requires a large number of raw materials. The two main materials used in the integrated

process are iron ore and coking coal. Iron ore provides the ferrous content for steel, and is used almost exclusively

by the steel industry. Coking coal is used to produce coke, which is an essential ingredient that provides heat and the

carbon necessary to reduce the iron ore (i.e. to remove oxygen from the ore). Ferrous scrap is the key input in

electric-arc furnaces, where recycled steel is melted and subsequently rolled into new steel products. Scrap is also

used in combination with iron in basic oxygen steel furnaces, to reduce levels of heat in the furnace.

The Indian government is implementing measures to discourage raw materials exports but ultimately the goal is to

create conditions that will allow the steel industry to grow in India. In the area of iron ore government measures are

being taken to improve domestic production, such as introducing new legislation to expedite the process of

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allocating mineral concessions and a new Land Acquisition Act to facilitate the process of land acquisition for

mining projects, measures to promote exploration of iron ore, examining ways of accessing minerals in

environmentally sensitive areas, and through open foreign direct investment

policies. In order to improve the availability of domestic iron ore for the steel

industry, provisions have been introduced in mining legislation that allow for

preferential allocation of mining leases to enterprises with higher value added

operations such as steel. In addition, the government believes that export-led

mining production needs to be lowered in order to preserve the environment

and prevent illegal mining.

Most of the country’s domestic coking coal reserves have high ash content,

which make the coal not suitable for the steel industry. Due to short domestic supply, and the rapid growth of the

steel industry, Indian steelmakers will continue to rely significantly on imported coking coal in the coming years.

Policy measures taken by the government include introducing a new Land Acquisition Act, as mentioned above, to

facilitate the process of land acquisition for coal mining projects), the acquisition of coal assets abroad (through

International Coal Ventures Limited, a joint venture involving five major public sector companies), encouraging

coal gasification projects for the steel and sponge iron industry, and exploring environmentally friendly underground

mining technologies.

India’s policy approach is aiming to augment the resource base through changes in mining policy with greater

involvement of the private sector. The process of mine allocation is also being streamlined and efforts are being

made to speed the development of the allocated mines. Moreover, the Indian government is encouraging the

acquisition of foreign raw material assets by Indian companies. Lastly, government intervention in the market,

using fiscal and other policy instruments, is seen only in exceptional cases involving strategic interest of the

relevant user industry.

The main challenges facing the steel industry today are overcapacity, high raw material/energy costs and price

volatility.

Taking these in order, the industry has over- invested in new capacity for several reasons:

• Investments in technology upgrades are often accompanied by capacity increases.

• Availability of relatively cheap capital for new investment in countries such as China.

• China, Russia and India are large, with high internal transport costs, meaning mills supplying local markets can

survive.

• Producers in Russia, India and Ukraine in particular have low production costs (due to the availability of local

raw materials); this is also partly true for Turkey.

• The open international market means new mills can often export at least some of their excess steel production to

other regions at low prices.

On the other side of the equation, weak demand, especially in Europe, but also in Japan, CIS, and even the USA

have meant slower growth than most mills anticipated. Closures in Europe, and to a lesser extent elsewhere have

partially helped cut overcapacity, but to date they have been insufficient.

High raw material/energy costs are due to the fact that the main energy source for a blast furnace is coking

coal/coke. Iron ore costs are also relatively high and power costs are rising. Some countries gain from power

subsidies. Price volatility – balancing raw material costs with sales prices - has also hurt steel producers, most of

whom had long term raw material supply contracts.

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Iron and Steel - Average specific energy consumption in the Indian

iron and steel sector has also been declining over the last few years .

In this industry technological improvements at different stages of the

manufacturing process that can further increase energy efficiency and

reduce carbon emissions include the following trends in thermal

specific energy consumption in the Indian iron and steel sector.

Source: Bureau of Energy Efficiency

General

● Replacement of open-hearth furnaces with basic oxygen furnaces

● Use blast gas for generation of power

● Hot charging of cast steel for manufacturing rails and universal

beam

● Injection of blast furnace gas in kiln to reduce coal consumption

● Increase the charging area of hearth furnace by replacing the insulating bricks with ceramic lining

● Reduce fuel gas consumption by controlling furnace pressure and increase the calorific value of mixed gas

● Optimize tapping temperature of molten metal

● Segregate high temp and low temp molten metal requirement

● Provide baffles for the furnace openings to minimize the heat escape

● Optimize the weight of trays in the ovens

● Load the oven optimally

● Avoid heat escape fresh air infiltration in ovens

Reheating Furnace

● Use of oxygen lancing in the furnace during the melting stage to hasten the process of melting

● Installation of continuous billet casting m/c

● Automatic door closing mechanism to avoid heat losses

● Installation of VFD to centrifugal pumps and fans

● Adequate refractory material to minimize heat loss

● Computerized control system for re rolling mills

● Charge preheating with exhaust flue gas like Energy Optimization Furnace (EOF)

Induction Furnace

● Minimise the tapping time

● Introduce electrical energy monitoring systems like kWHr indicators

● Select suitable size density and condition of charge materialBuilding a Low-Carbon Indian Economy

Confederation of Indian Industry 90

● Ensure efficient design and operation of charge material and molten metal handling system

● Reduce holding periods to minimum

● Use correct size and shape of pouring and gating system

● Replace mains frequency furnace with medium frequency furnace (long term)

● Introduce electrical energy monitoring systems (simple measure)

● Optimize molten metal pouring time by proper scheduling of melting furnaces and casting section (simple

measure)

● Use cleaned recirculated rejects to minimize stay formulation (medium term)

● Minimize radiation losses (medium term)

● Scrap segregation and compacting

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Arc Furnace

● Utilise Oxygen lancing

● Bottom purging system for quicker melting and for homogeneous temperature

● Computerised control for power feeding

● Installation of Oxy fuel burners

● Utilise waste heat and preheat scrap

● Conversion of vertical ladle preheating to horizontal ladle preheating91 Confederation of Indian Industry

● Utilization of slide gate method of liquid metal pouring rather than the conventional method

● Providing insulated hood to ladle

● Reducing the temperature drop of molten metal by covering with lid caps

● Scrap segregation to reduce refining time

● Secondary refining in a separate furnace

● Installation of High power or ultra high power transformers

● Automation at electric furnaces

● Eccentric bottom tapping Foundry

● Installation of thermocouples at different zones to avoid overheating.

● Improve furnace insulation by providing ceramic fibre veneering

● Install burner plate and other auxiliary equipment . Heat Treatment Furnaces

● Waste heat recovery system for thermal fire furnace

● Installation of low thermal mass insulation for both electrical and thermal furnaces

● Improving combustion efficiency of thermal fire furnaces

● Installation of automatic temperature controllers in furnace

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Legal News

India, UAE sign Bilateral Investment Promotion and Protection Agreement

13.12.2013 (UNI) India and the United Arab Emirates signed a Bilateral

Investment Promotion and Protection Agreement (BIPPA) to boost

investment flows between the two countries.

The agreement requires each country to encourage and create favourable conditions for investors of the other

country to make investment in its territory and to admit investments in accordance with its laws.

'It is hoped that the agreement would serve as a catalyst in boosting investment flows between the two countries,'

said an official release.

The text of the agreement was finalised on October 30-31, 2013 in Abu Dhabi.

The agreement was signed here by Minister of State for Finance Namo Narain Meena and Mr Obaid Humaid Al

Tayer, Minister of State for Financial Affairs of the UAE. UNI

Sub: The New Amnesty Scheme 2014, for withdrawal of criminal cases

tilt;d against the Insured Persons and Employers under Sec 84, 85

arul 85 A of ESI Act 1948 and settlement of cases filed by employers

un(:ter Sec 75 ofESI Act 1948

1. to reduce the number of litigation by providing a mechanism for resolution of disputes outside the court.

2. To earn goodwill of stakeholders and thus enhance the brand image of the Corporation.

Keeping in view above factors, the New Amnesty Scheme 2014 provides for the withd 'awal of all prosecution cases

filed uls 84 and 85 of ESl Act and court cases u/s 75 anc. 82 of the ESl Act upto 31st December 2013 subject to

following terms and condition: :

SE'I'TLEMENT OF COURT CASES FILED UIS 75 AND APPEAL UIS 82

L. DISPUTE OF COVERAGE The Scheme shall include all cases filed in which the employer has disputed the

coverage which may be settled subject to the following conditions:

In case o(closed units,

Unit is closed for more than 5 years as on 31st December 2013

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Case is pending for more than 5 years as on 31st December 2013

No assessment has been made for the period under dispute and litigation period upto the date of commencement of

Amnesty .Scheme 2014.

In case o(running units

If the factory is functioning and the employer produces genuine records to substantiate his plea regarding non-

coverage or coverage from later date.

2. DISPUTE OF CONTRIBUTION This Scheme shall also include cases in which the employer has disputed the

determination or recovery of contribution in the Employees' State Insurance Court, uls 75 of the ESI Act and appeal

u/s 82 Upto 31st December 2013, subject to the fulfillment of the following conditions :-

1. The employer shall file a petition before the court where he has raised the dispute and seek permission of Hon'ble

Court for out of settlement of matter under litigation. If court allows, then the matter shall be settled as per this

Scheme. The employer/IP shall apply for the scheme in the enclosed proforma of Annexure 'A',

11. The employer shall pay both the Employees' and Employers' share of contribution in full as per their records,

which he shall produce before the assessing officers if the contribution has been assessed on assumed wages and he

shall comply with other provisions of the Act.

iii. In case the relevant records are not available with the employer, they shall produce alternative records such as

Income Tax Record etc and shall pay the contribution accordingly as per that record.

iv. However, if the employer is not able to produce any records and the assessment has been made in respect of

wages other than the wages shown in Regulation 32 Register, he shall pay the contribution which shall not be less

than 30% of the assessed amount of contribution. The cases where assessment has already been made as per Hqrs

instruction NO. P-11l13/97-Ins-IV dated 26/5/2003 or where the contribution has been assessed on actual bases will

not fall under the purview of this Scheme.

v. The employer pays the Interest in full

vi. No damages shall be levied.

vii. The employer shall also furnish an undertaking to the Corporation to the effect that he/she shall be regular in

compliance in the provisions of ESI Act in future or else he/she shall forfeit the right to avail of such amnesty

scheme.

CASES WHERE EMPLOYER HAS DISPUTED THE LEVY OF DAMAGES

There are cases where employer has disputed levy of damages in the court of law after making payment of

contribution and interest. These cases filed upto 31st December 2013 may also be considered for withdrawal with

benefit of 50% waiver in damages since court insist on proof of contumacious conduct for upholding orders passed

under 85-B (Proof of which is difficult).

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SCHEME TO WITHDRAW COURT CASES FILED U/S 84, 85, 85-A of ES I: ACT, 1948

1. Cases filed against the Insured Person under section 84 of the ESI Act

Prosecution filed against the IPs U/S 84 of the ESI Act for giving wrong declaration/statement resulting in excess

payment to him/her may be withdrawn subject to the condition that

1. the entire amount paid in excess to the Insured person is refunded in full be him/her to the Corporation

11. No interest will be claimed

iii. An undertaking is also given by Insured Person to the effect that helshe would not give wrong

declaration/statement in future.

2. Cases filed against the employers under section 85 and 85-A of the ESI Act up to 31st December 2013

Prosecution cases filed against the employers uls 85 and 85-A of the ESI Act upto 31st December 2013 may be

withdrawn subject to the following conditions :-

1. The employer shall pay both the Employees' and Employers' share of contribution in full as per his records, which

he shall produce before the assessing officers, if the contribution has been assessed on assumed wages.

11. In case the relevant records are not available with the employer, he shall produce alternative records such as

Income Tax Returns etc and shall pay the contribution as per that record. However, if the employer is not able to

produce any records, he shall pay contribution on the basis of following, in the same order, (i.e only in cases where

the records as per option 'a' is not available, down below alternatives in the same order is to be exercised for

assessing dues.)

The rate of monthly contribution paid for the month prior to the month from which default started.

OR

b) Monthly wages declared in form-Ol

OR

c) Monthly wages reported by SSO in the Survey Report

OR

d) Minimum wages applicable in the State/Region

iii. The employer pays the interest due for the period of prosecution in full.

iv. No damages shall be levied.

v. The employer shall also furnish an undertaking to the Corporation to the effect that he/she shall be regular in

compliance with the provisions of ESI Act in future or else he/she shall forfeit the right to avail of such Amnesty

Scheme.

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TAXATION NEWS

West Bengal VAT

Directorate of Commercial Taxes : Trade Circular No. 04/2014 Dated : 14/03/14

Sub : Change in procedure of submission of application for and amendment of certificate of registration by dealers registered under the WBVAT Act, 2003. As part of ongoing computerization process, a change has been brought about in the procedure of filling application for amendment in the certificate of registration by a dealer registered under the WBVAT Act, 2003. Instead of the existing manual process, he shall have to make his application compulsorily to his assessing authority electronically. However, for amendment cases that are not available in the list of amendments enumerated in the “e-Amendment of Registration” application, dealers shall apply before the respective assessing authority following the existing manual procedure. The new procedure to be followed by every dealer is laid down below :

Dealer intending to apply for amendment in his RC will log on in the Directorate’s website www.wbcomtax.gov.in using his user ID and password allotted to him. No manual application shall be entertained.

He has to submit his amendment application online in the Form as may be applicable in his case following the instruction given therein. He will get a print out of an acknowledgement slip for such submission.

After transmitting the data electronically, he will send a duly signed print-out of the application along with a photo copy of the acknowledgment slip, self attested photocopies of the necessary supporting documents in connection with the amendment and original RC issued to him prior to the introduction of e-generation of RC by hand including courier / by speed post or registered post to his assessing authority within ten working days from the date of making application electronically. Assessing authority will take care of the court fee matter separately.

If his assessing authority is satisfied that the application is in order, he shall, within forty five days from the date of receipt of the print-out of the application, amend the RC of the dealer and will inform the applicant dealer the fate of his application through e-mail. The dealer can take print-out of the dematerialized amended RC from the dealer’s profile in the website.

(Binod Kumar) Commissioner, Sales Tax, WB

Levy of fee u/s 234E if the Income-tax Act, 1961 The Finance Act, 2012 had w.e.f 1/7/2012 inserted Chapter XVII-G to introduce Section 234E in the statute book as per which a fee of Rs. 200/- was sought to be levied in those cases where a person failed to deliver a statement within the time prescribed u/s 200(3) (Statement of deduction of tax at source) or the proviso to Section 206C(3) (Statement of collection of tax at source) of the Income-tax Act, 1961. From the provision as it stands, there is no remedy prescribed for getting relief in those cases where there are genuine reasons for such delay or failure. This provision of late has been subject matter of debate.

http://www.wbcomtax.gov.in/

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a) Now recently, the Karnataka High Court vide order dated 19th February, 2014 in the case of

Adithya Bizorp Solutions India Private Limited & Ors VS Union of India has stayed the notices issued u/s 234E of the ACT.

b) Earlier on 18th December 2013 Kerala High Court also in the case of Narath Mapila LP Secool

Vs Union of India & Ors stayed the proceedings in relation to levy of late fee u/s 234E of the Income-tax Act,1961.

The question of levy of late fee at the rate of Rs. 200/- per day appears to be very sleep and a cap on the fee through now pegged at the amount of tax deductible or collectible appears to be on the higher side. It is hoped that the above orders would culminate in a judgment giving relief to the assesses.

Key proposals of the Direct Taxes Code 2013

The Direct Taxes Code (DTC) is an attempt by the Government of India (GOI), for the past many years, to revise, consolidate and simplify the language and structure of direct tax laws in India into a single legislation. DTC 2010 was introduced in the Indian Parliament in August 2010 and since then there have been recommendations from various stakeholders, as well as the Standing Committee on Finance (SCF) specifically formed for the purpose. As a follow-up on this initiative and as stated by the Finance Minister (FM) in his Interim Budget Speech in February 2014, a “revised" version of DTC 2013, after taking into account the recommendations of the SCF, has been released.

Broadly, the revised version of DTC 2013 largely aligns with the provisions of the Indian Tax Laws (ITL), in a sense that many of the proposals contained in the earlier version of DTC 2010 have already been introduced in the ITL as part of Finance Act (FA) 2011, FA 2012 and FA 2013 provisions. Prominent among these are the introduction of a broad-based General Anti-avoidance Rule (GAAR), provisions for taxation of indirect transfer of Indian assets and widened source rule in case of taxation of royalty and fees for technical services (FTS).

The revised provisions in DTC 2013 vis-à-vis the provisions under DTC 2010 are largely either aligned with that of ITL provisions or are a response to the recommendations of the SCF. Further certain novel provisions are also included such as additional tax levy on certain persons having high net worth such as dividend tax levy on dividend income earned by resident shareholders in excess of INR10 million, 35% tax rate for individuals/HUFs where the total income exceeds INR100 million.

While some of the provisions such as alignment of the definition of POEM, exclusion of small shareholders from indirect tax levy, providing white list of jurisdictions for non- trigger of CFC are welcome provisions, other provisions like lowering the threshold to 20% for trigger of indirect transfer, making active test condition for trigger of CFC provisions stringent could cause concerns.

It may be noted that DTC 2013 is presently a draft version which can be implemented only after it is presented before the Indian Parliament and is thereafter approved by it after debating on it. This can happen only when the next Parliament session commences after the general elections that are scheduled in April/May 2014 concludes and a new GOI is formed. Therefore, the intent in making the DTC 2013 draft available for public comments at this stage appears to be to send out a message that the present GOI has completed the necessary work on DTC 2010. In case the new GOI, that is formed post elections, intends to continue with the work, it has the option to resume from the present stage of DTC 2013.

While presently, the fate of the DTC 2013 is uncertain, one can hope for more certainty once the new GOI is formed, post elections, in June/July 2014. Nevertheless, it would be helpful to assess the impact of the proposals on current structures and business models.

Source : Dinesh Agarwal | Partner | Tax & Regulatory Services Ernst & Young LLP

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GOVERNMENT OF WEST BENGAL

DIRECTORATE OF COMMERCIAL TAXES 14, BELIAGHATA ROAD, KOLKATA -15

Trade Circular No.06/2014 Date : 08.04.2014

Sub: Change in procedure in the e-Transit Declaration module

In its continuous endeavor to improve online services, the Commercial Taxes Directorate, West Bengal has brought about certain changes in the existing e-Transit Declaration module. The changes in the procedure are described as under – First, the transporter willing to generate e-Transit Declaration (hereinafter referred to as e-TD in short) has to obtain a onetime registration through the ‘Transporter Registration’ link (the first link) in the e-TD module available in the official website of the Commercial Taxes Directorate www.wbcomtax.gov.in . Transporters have to submit the particulars of business, phone no., mail id etc. After submitting the information, an 'Access Code' will automatically be forwarded to his registered mobile number. Second, after getting the access code, it is to be used in the second link to generate USER ID & PASSWORD which are necessary for TD generation. These first two steps are for one time use for one transporter. Finally, using generated user id & password, transporters have to login the third link each time they want to generate a TD. The TD Generation Page has partially been modified to capture more information on consignor, consignee, invoice, consignments etc.

Sd/-

(Binod Kumar) Commissioner, Sales Tax, West Bengal

Memo No. 289 CT/PRO Date:08.04.2014 3 C/PRO/2012 Copy forwarded to Addl.CCT/ISD for information with the request for uploading it in the Directorate’s website for information of all concerned.

Sd/- (A Bandyopadhyay)

Sr. JCCT/PRO

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METALS OUTLOOK & MARKET TRENDS 2014

Date : 26th

April, 2014

Organiser: Minerals & Metals Review

Venue: The Orchid Hotel, Mumbai, India

Website:http://www.mmronline.com/

Link:http://mmronline.com/HtmlPages/Metals%20Outlook%20&%20Market%20Trend

Minerals, Metals, Metallurgy & Materials (MMMM) 2014

4-7, September 2014

Pragati Maidan

New Delhi

For Booking & Enquiries

International Trade and Exhibitions India Pvt. Ltd.

1106-1107, Kailash Building, 26 K.G. Marg, New Delhi- 110001, India

Tel: +91 11 40828282

Gagan Sahni: +919810036183

Varun Sharma:+91 11 40828208

Smita Roy: +91 11 40828217

Sandeep Arora: +91 11 40828227

Metal + Metallurgy China 2014

Organiser: China Iron and Steel Association China Foundry

Association Chinese Mechanical Engineering Society Me

Venue: China International Exhibition Center, Beijing.

Web Site: www.mm-china.com

----------------------------------------------------------------------------------------- ---------------------------------------------------

Metal & Steel Middle East 2014

Organiser: Arabian German Exhibitions Ltd.

Venue: Cairo International Convention and Exhibition Centre, Cairo, Egypt

Website:www.metalsteeleg.com

Link:http://www.metalsteeleg.com/Registratio

http://http/www.mmronline.com/

http://mmronline.com/HtmlPages/Metals%20Outlook%20&%20Market%20Trends%202014%20-%20Registration%20Fo

http://www.mm-china.com/

http://www.metalsteeleg.com/

http://www.metalsteeleg.com/Registration.php

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STEEL NEWS

Steel producers lay emphasis on retail marketing

The positive indicators in the last quarter of the current fiscal have raised hopes among major steel producers that

the market will pick up once a new government is formed. The market stared appreciating slightly since December

2013 and there seems to improvement in sentiment in the global as well as domestic market

In the domestic market steel prices came down from Rs. 7000 to Rs. 6000 a tonne in 2012-13,but Rs. 1000-1500 a

tonne during the last quarter despite fall in raw material prices. In the long products market, steel prices are largely

influenced by secondary producers who account for 75 per cent of market share Ingot index has gone up to Rs.

34,200 during the last quarter of 2013-14 from Rs. 31200 in the year ago period.. Such an increase and consequent

movement in steel market are mainly due to shortage of scrap feed for secondary producers, pick-up in international

market, dry season in India and an overall positive business sentiment, Director (Commercial) of Rashtriya Ispat

Nigam Limited (RINL) T K Chand total The Hindu.

RINL and other leading manufacturers such as SAIL, Tata Steel, JSW and JSPL are laying thrust on customer care

to promote their products. Tata has been focusing on the retail business model. Market sources said JSW was

planning to set up 1000 shoppers across the country to exploit the retail market RINL is poised to introduce its new

retail model of star retailers and channel partmers

The Hindu, Nes Delhi 01.04.2014

Indian GDP growth will improve to 5.5pct in 2014-15 - Fitch Ratings Business Line reported that Fitch Ratings affirmed India’s sovereign rating at BBB- with a stable outlook even as it projected the

country’s growth to improve to 5.5% in 2014-15.

BBB- ratings indicate that expectations of default risk are currently low. The capacity for payment of financial commitments is

considered adequate but adverse business or economic conditions are more likely to impair this capacity.

Pointing out that the course of the Indian economy is uncertain in view of the on going Parliamentary elections, the global rating

agency forecast real GDP growth to rise from 4.7% in FY14 to 5.5% in FY 2015 and 6% in FY 2016.

Fitch said that once the next coalition starts implementing its economic policies, it will become clearer whether the economy can

return to a higher sustainable growth path or whether it remains stuck at current levels. A policy push that includes structural and

governance reforms, fiscal consolidation and efforts to rein in inflationary pressures would likely require a coherent coalition

with a strong electoral mandate.

Fitch said that the Centre seems to have met its Budget deficit target of 4.8% of GDP for FY14, despite the looming elections.

But this was only achieved through substantial one-off measures.

Source – Business Line

(www.steelguru.com)

ASSOCHAM expresses serious concern on IIP for February 2014 Apex industry body ASSOCHAM expressed serious concern on the industrial deceleration in February 2014, notably as the latest

information indicates that performance of manufacturing industry has turned from bad to worse.

Mr DS Rawat secretary general of ASSOCHAM said that "The significant shrinkage in the production of capital goods and

consumer durables shows that industrial revival is far more difficult in the present scenario."

He said that "The negative growth of manufacturing has got serious implications for the overall growth, employment and trade

http://www.steelguru.com/

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balance as the lack of depth in manufacturing has been affecting India’s economic security and stability.”

Mr Rawat said that ASSOCHAM has strongly recommended for a paradigm shift in the Government approach. To start with, the

new government must work towards building investor confidence. Discouraging cheap imports of various manufactured goods

like electronics, chemicals and steel is the key to boost domestic manufacturing activity.

He said "Apart from key policy initiatives, various Government Ministries must act in unison towards simplifying procedural

hurdles."

Source – Strategic Research Institute, Steel Guru

(www.steelguru.com)

Indian Railways cross freight target in 2013-14 Business Line reported that the Indian Railways carried 1,053.54 million tonne of cargo in 2013-14, up 4.3% against the traffic

moved in 2012-13. The growth in fiscal 2013-14 is higher than the annual growth of 4.13% seen in fiscal 2013 and is registered

on a higher base.

With this, the Railways has crossed the upward revised target to move 1,052 million tonne of freight set in the interim Budget.

Mr Devi Prasad Pande Member Traffic, Railway Board said that “The sharpest incremental growth was seen in non traditional

commodities, such as cement, and other commodities such as onion, sugar and de oiled cakes.”

The growth is also supported by commodities such as coal, petroleum products, steel and fertiliser. Higher loading by Railways

which moves coal to power plants, iron and steel to factories and other cargo from port is good news, as it indicates economic

activity.


(www.steelguru.com)

Surge remains unabated in long steel market in India The flare in input material and long steel price levels remained steadfast on Monday. April has witnessed an unusual rally in pencil ingot and long steel. Price levels of pencil ingot have appreciated by upto INR 1200 per tonne and TMT price by upto INR 800 per tonne. As mentioned earlier pick up in buying has been triggered by improved construction activity and stock replenishment by re-rollers has punched the market sentiments. Resounding rally in international scrap prices by USD 45 per tonne over last 6 weeks has spiked the cost for furnace owners in India. Import levels of scrap have touched USD 385-390 per tonne, CFR India recently and despite INR appreciation has escalated domestic price levels by INR 500-1000 per tonne. Chronic power shortage during summer has led to shortage in pencil ingot availability thereby flaring the prices further. Outlook remains positive after the elections if a stable government comes to power thrust will be primarily on infrastructure (USD 1 trillion planned expenditure in 12 Five Year Plan). Mega projects of Delhi-Mumbai Industrial Corridor and Chennai-Bangalore Industrial Corridor will boost steel demand. Moreover reality sector gasping for credit might kindle with credit easing on expected lines after the elections. Pencil Ingot

Chennai Change

Mumbai -100

Chennai 0



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Kolkata 250

Mandi 300

Raipur 200

Alang 300

Kanpur 0

Rudrapur 0

Ahmedabad 301

Ghaziabad 200

Muzaffarnagar 250

Hyderabad 0

Raigarh 300

Durgapur 200

Nagpur 0

Jamshedpur 250

Jaipur 300

Rourkela 200

Bhiwari 0

Ludhiana 182

Change is on 14th April 2014 as compared to 11th April 2013 Change in INR per tonne Rebar (TMT/QST)

Location Change

Mumbai 0

Chennai 0

Kolkata 300

Delhi 0

Mandi 353

Raipur 236

Kanpur 0

Rudrapur 0

Ahmedabad 100

Hyderabad 236

Indore 200

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Bangalore 0

Ludhiana 0

Muzaffarnagar 0

Change is on 14th April 2014 as compared to 11th April 2013 Change in INR per tonne Source – Strategic Research Institute, Steel Guru (www.steelguru.com)

Steel ministry calls for speedy approval to ArcelorMittal's Jharkhand project Business Line reported that the Steel Ministry has asked its coal counterpart to expedite the process to grant approval to the

mining plan of a block in Jharkhand allotted to steel giant ArcelorMittal for its proposed INR 50,000 crore plant.

The development comes in the wake of a meeting of a high level panel to address roadblocks impeding mega investments in the

steel sector.

A Steel Ministry official said that “Steel Secretary Mr G Mohan Kumar has asked the Coal Ministry to expedite the matter of

approval of mining plan for Seregarha coal block of ArcelorMittal.”

According to the official, in the Inter Ministerial Group’s meeting to fast track mega investments in the steel sector last month,

Coal Ministry representatives said that the issue was being examined by a committee.

The world’s largest steelmaker has plans to set up 12 million tonne per annum steel plant in Jharkhand at an estimated investment

of INR 50,000 crore. The proposal is stuck for over eight years now for want of regulatory clearances and land acquisition.


(www.steelguru.com)

Increase presence in global markets : SteelMin to SAIL

State-owned SAIL has been asked by the Steel Industry to increase presence in the global market by making available special

products in emerging economies. SAIL exports only 3-5 of the salable steel. Reviewing the performance of the PSU at its

central marketing organization (CMO) headquarters in Kolkata, Steel Secretary G Mohan Kumar advised the company “to

further widen its international presence and reach value-added steels to newly emerging markets across the world”.

A statement by SAIL said that Kumar urged its marketing team to overcome the challenges of the sluggish market by utilizing

the opportunities that will come from SAIL’s ongoing modernization and expansion drive. Kumar’s suggestion come on the

heels of a parliamentary panel asking the company to strengthen its global presence. He evinced keen interest in the variety of

stainless steel products produced by SAIL’s Salem Steel Plant.

During the just concluded financial year 2013-14, SAIL achieved 7% growth in domestic sales to 12.1 million tonnes, as against

11.3 MT in the previous fiscal. Exports saw 28% jump, although on small base. “ SAIL –CMO recorded a growth of 3% and

9% in sales long and flat steel products respectively, despite a subdued market during 2013-14”, the statement said.

Emphasis on value-added steel sales enabled SAIL to market 2.2 lakh tonnes of special steels, of which nearly one lakh tonnes

comprised stainless steel, it said . This is part of the overall production of 5.3 MT of special quality steel produced by the

company in FY4, it said, adding that the year also saw SAIL supplying special quality slabs to meet the requirements of Vikram

Sarabhai Space Centre.

FREE PRESS JOURNAL, MUMBAI 05.04.2014

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