Customs Levy On Copper Scrap, Wire Bars Anomalous

The Bombay (India) Metal Exchange, an association of non-ferrous metals trade and industry, has drawn the attention of the Indian Union government to the fact that manufacturers of copper tubes in the country face a bleak future following the reduction in customs duty on copper tubes and the increase in international copper prices.

In a pre-budget memorandum to the government, BME has pointed to an “anomaly” in the customs duty structure whereby customs duty on copper tubes for the major user industry, that is, air-conditioning and refrigeration, has been brought down to 15 percent, whereas the customs duty on copper scrap, copper cathode, copper wire bar, etc, still stands at 20 per cent.

The BME has appealed to the government that customs duty on copper scrap, copper wire bar and copper cut pieces be kept at 5 percent and the customs duty on copper tubes for use in air-conditioning, refrigeration be kept at 20 percent.

As a result of the differential duty, the BME pointed out, the finished product attracts a lower customs duty than the raw material — that is copper scrap, copper cathode and copper wire bar.

The BME has also pointed out that the price of copper on the London Metal Exchange has increased by 75 percent in the last one year. This “anomaly” has led to a situation where imported copper tubes have now become cheaper than the locally made copper tubes, BME said.