Chinese producers are lobbying Beijing to keep higher tax rebates on exports of semi-finished aluminium products as lower rebates would raise costs and hurt their investment, industry officials said on Tuesday.
Beijing has decided, in principle, to reduce the rebate for value-added tax on aluminium products such as extrusion, plates and foils, as part of its curbs on the energy-intensive aluminium industry.
"The original plan is October 1. But this matter has stirred up some controversies, therefore it has not been settled," a senior executive at a large aluminium smelter in the north, said of the plan to reduce rebates.
Beijing's proposal had met strong resistance as its curbs on smelting capacity had prompted many large aluminium producers, including the parent of Aluminium Corp of China Ltd, to invest in fabricating plants.
China has long granted rebates on some exports for which it charges 17 percent valued-added tax. Exporters can claim 13 percent of the export price as a rebate on aluminium products but they do not receive any rebates on primary aluminium.
The rebates were designed to encourage exports, but China is reining in the aluminium industry and reducing outflow. Industry officials had expected Beijing to reduce the rebate to 5 to 6 percent from July.
Producers were demanding higher rebates of 8 to 10 percent on products that were harder to produce, industry officials said. They said Beijing had agreed to keep higher rebates on some products but it had not agreed the proposed rates.
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