China Raises VAT on Imports of Raw Materials for Ferroalloys

The Central Government of China has revised from the 1st January of 2009 the value-added tax to be imposed on imports of raw materials for production of ferroalloys. This revision is applied to 82 items of raw materials and the value-added tax has been raised from 13% per ton to 17% per tonne.

As regards raw materials for production of ferroalloys, manganese ore, chrome ore, tungsten ore and molybdenum ore are the objective materials to raise its value added tax. This raise of the value-added tax on imports of raw materials certainly causes to push up the cost to produce ferroalloys and puts a substantial influence on producers of ferroalloys in China. So far the Government did not comment on rebate of this value-added tax and, accordingly, new rate of 17% is fully imposed on imports of raw materials.

For a reference, the value-added tax is also imposed on transactions of ores produced in China and this rate has been raised from 13% to 17%. At present, large quantities of manganese ore and chrome ore imported into China have been stocked at warehouses in wharves of discharging ports and these stocks of manganese ore and chrome ore have a big probability to become the objective cargoes to raise its value added tax.