China scraps Vat exemption for export-oriented steel products
China, the world’s largest steel-maker, on Friday announced scrapping of the value-added tax exemption for home-made steel products used for exports, the ministry of finance said here.
China began offering the tax exemption in 1998 when prices of home-made steel products were higher than world market prices and downstream firms imported steel products from overseas in huge quantities, causing great difficulty for domestic steel producers.
A document issued by the ministry in cooperation with the state administration of taxation noted that the tax privilege had been very helpful in supporting domestic steel firms in turning out steel products in short supply in the country and improving their industrial mix.
But things have changed in terms of the steel trade situation at home and abroad as steel prices in China are lower than that of the world market. Also, steel production causes too much pollution and consumes too much energy and other resources, the ministry said.
More: financialexpress.com