The Chhattisgarh sponge iron industry would have to bear an additional Rs 600 crore in the form of a Green energy cess in the next fiscal and many of the smaller units might not survive, Vijay Jhanwar, General Secretary of Chhattisgarh Sponge Iron Manufactures’ Association informed ISMW.
Elaborating, Jhanwar said that the sponge iron industry fails to understand why this cess should be applicable to the sponge iron industry because it is not using this as a fuel but as a basic raw material for its chemical process.
“The energy which we are using for production of sponge iron is already being taxed for green energy. Thus, this dual cess is not justified,” he said.
Criticising the proposed green energy cess, Jhanwar said: “In March 2015, the price per ton of sponge iron was Rs 18,000 –Rs 20,000. One year later it now stands around Rs 11,500 to Rs 13,500 per ton. It is true that the cost of coal and iron ore too have come down but not to the level to meet this huge price deficit. Moreover, this Rs 400 per ton green energy cess would be borne by the sponge iron industry alone as steel-makers would not allow any price hike.”
He added that since the accounts of most of the steel companies are in the red, survival of many of the smaller units would be at stake as they would not be in any position to absorb any extra financial burden.
As far as coal is concerned, domestic supply has increased but its pricing is high, he said.