Published Date : Jul 14, 2014
China has said that it will end its tax protection benefits on a few varieties of imported steel. The decision was made by the country’s key organizations - the State Administration of Taxation, General Administration of Customs and Ministry of Finance.
As per this new rule, taxes and tariffs will be levied on the import of 78 products that the domestic market in China is capable of producing. The rule will come into effect from July 31, and will be applicable to products such as electrical steel and steel wire. However, orders that were signed before the cut-off period of July 31, and are scheduled to be shipped before the end of the year will be able to trade under the policy.
This particular policy was initially conceptualized to boost foreign investment and encourage international trade. However, China has now felt the need to encourage the usage of its domestic steel products, said an analyst working with Hua’An Futures.
Currently, imported steel constitutes over 50% of China’s total steel imports at 6 million tons. This comprises both cold and hot rolled steel.
Mysteel.com’s chief information officer Xu Xiangchun said that the cost advantages enjoyed by a number of imported steel varieties will no longer exist, with the cancellation of the current tax policy. This, in turn, will make domestic steel producers compete with international counterparts on an equal footing. The market is now expected to be more competitive and provide better business prospects to the domestic steel producing units in China.