Union Commerce Minister Kamal Nath has taken up the iron ore exporters' cause with the prime minister, pleading for a review of the 15 per cent ad valorem export duty slapped on the iron ore as a measure of additional resource mobilisation.

Seeking Dr Manmohan Singh's intervention, he has stressed that the department of revenue should undertake 'a comprehensive view of the total revenue earned by the government through all other levies (on iron ore), including railway freight, to realise how much iron ore export is already taxed.

He said that the department of revenue can ask the Railways to share part of its revenue for resource mobilisation instead of 'bleeding the iron ore export industry.'

He also warned that exports were likely to come down in the coming years because of the short-term nature of the Chinese market and its lowering demand. "This will have direct impact on the prices of domestic supply of lumps," he warns.

Kamal Nath said in a letter to the prime minister that the iron ore export sector is already faced with imposition of many state and central levies. "What  is more critical is the quick revision of railway freight which has gone up virtually three times between April 2007 till July 2008."

The commerce minister noted that the Railways also levy other surcharges such as busy season surcharge, congestion surcharge, developmental charges, terminal charges, etc.

"On a projected movement of 54 million tonne of iron ore through rails, the Railways earned approximately Rs 4,700 crore (Rs 47 billion) in 2007-08. In 2008-09, they are expected to earn approximately Rs 7,880 crore (Rs 78.80 billion) " as against 15 per cent ad valorem duty on export of 90 million tonne of ore would yield Rs 5,400 crore (Rs 54 billion).

"It is preferable that the department of revenue shares part of the revenue earned by Railways" instead of separately levying the export duty, Kamal Nath added.