In the Budget presented on Tuesday by Finance Minister P Chidambaram, the government reimposed 5 per cent customs duty on melting steel scrap, which was withdrawn in 2004-05.
"The price of bicycles will certainly increase by Rs 20 to 25 per unit on account of the levy of 5 per cent custom duty on scrap announced in this budget, as it will directly impact our input cost," Satish Dhanda, president, Indian Bicycle Manufacturers Association said hoping that the industry will go for revision of prices within a month.
After the announcement, the prices of scrap, ingot, sponge iron and rolled products in Punjab steel industry has jumped by Rs 500 to Rs 700 per tonne, he said.
The prices of scrap increased to Rs 17,200 per tonne, up by Rs 700 per tonne while the price of ingot and other rolled products, which are key input for bicycle industry, have swelled to Rs 21,500 and Rs 24,000 per tonne, respectively.
"This move of the government will hit the steel industry of the state quite hard as it will increase the input cost," North India Induction Furnaces Association President K K Garg said, adding it will hamper the industry as it is largely dependent on imported scrap for their consumption in order to meet industry requirements.
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