China may restart VAT rebate in steel sector

China's Ministry of Industry and Information Technology is considering restarting a value-added tax rebate to support the nation's struggling steel companies, the Shanghai Securities New reported on July 31.

The Ministry aims to exempt steel companies that sell products to exporters from a 17-percent value-added tax.

The scheme was first introduced in 1998 to encourage exporters to increase purchases of domestic steel products rather than imported materials, but was suspended in 2005, the newspaper said.

Silicon steel and shipbuilding steel are included in the scheme this time, while other products like steel cans, oil pipes and galvanized steel may also be included.

Twenty-seven companies will be allowed to participate in the scheme, the paper said.

Meanwhile, the ministry urged wider upstream and downstream cooperation in the steel sector, and encouraged steel producers to boost their services.