In a report tabled in the Rajya Sabha on Thursday, the 44-member panel also suggests that steel products, that attract less that five per cent duty, should also be exempt from the special additional import duty, which was recently reduced to four per cent from eight per cent announced in the Union Budget. The parliamentary committee wants the duty entitlement passbook scheme (DEPB) exempted from the purview of the special import duty as well.

The report on the demand for grants of the ministry for steel and mines, was prepared after parleys with industry clubs, central trade unions and bureaucrats. The panel chaired by Rajya Sabha member Raghavji, met representatives of the Confederation of Indian Industry (CII), the Federation of Indian Chambers ofCommerce and Industry (FICCI) and the Associated Chambers of Commerce and Industry of India (Assocham) on June 16.Central trade unions also participated in the discussions. On June 23, the standing committee on industry heard the secretary, of the department of steel, which has placed demands for grants to the tune of Rs 32.15 crore. The committee then concluded that the "steel industry (had) been in doldrums for more than a year."

In its report, the panel recommends that the "department of steel play a pro-active role to ensure a harmonious and integrated growth of the steel sector..." It also advises the Centre to provide some "additional reliefs...so that the recovery of the steel industry from recession becomes faster and easier."

The booty of reliefs for the steel industry includes a reduction of excise duty on all iron and steel products to 13 per cent from 15 per cent prevalent now. The excise duty on galvanised plates and coils (GP/GC) sheets should, moreover, be slashed to eight per cent from 15per cent, the panel says.

The standing committee feels that Modvat should not be restricted to 95 per cent, "as it penalises honest tax payers and, therefore, should be credited 100 per cent." It recommends a tax holiday for seven years for all new projects, involving investment of Rs 1000 crore and above, promoted by both the private sector and the public sector.

The parliamentary committee also recommends a `move towards a VAT system' and that infrastructure bonds be made income-tax free. The committee calls for a reduction of the basic customs duty on ferro nickel, nickel oxide, sinter and charge nickel from 10 per cent to five per cent.

It wants the import duty differential between prime grades and seconds or defectives enhanced to at least 10 per cent. The Standing Committee recommends waiver of the four per cent special import duty for coking and non-coking coal of less than 12 per cent ash content, since the vital steel-making ingredients were not indigenously available.

Other raw materialsthat qualify for the duty exemption, according to the panel, were metallurgical coke (of less than 16 per cent ash content,) ferro nickel, nickel oxide sinter, charge nickel and moly oxide. Early decision on IISCO: The panel also calls for `an early decision' on the rehabilitation of the Indian Iron and Steel Company (IISCO) and expresses concern at delays in the commissioning of the Steel Authority of India Limited's (SAIL) modernisation projects at Durgapur, Rourkela and Bokaro. It feels that "any further delay" in modernising IISCO, which is a subsidiary of SAIL, would have `serious financial implications'. The panel feels that the `only available alternative' for reviving the 76-year-old plant was `through the Steel Development Fund (SDF) route in two parts,' a write-off of Iisco's losses and liabilities and injection of fresh funds to the tune of Rs 2107 crore.

The proposal is already being considered by the Centre.