Cement firms seek budgetary cuts in excise, import duty

Fearing rising prices and competition from imports, cement firms are looking for reduced excise duties and a ban on imports ahead of the union budget.

With rising demands and increase in government infrastructure expenditure, cement manufacturers have raised their production capacities and prices, thus increasing the risk of decline in domestic demand and rise in imports. (See: Cement prices, production beat the slump)

"The industry is seeking an abatement on cement from the government. Cement is a bulk commodity with a high distribution cost and abatement will help bring down prices in the domestic market," said H M Bangur, president of the Cement Manufacturer's Association.

The association has asked for a 55-per cent cut in excise duty. Cement manufacturers currently pay excise along with other duties like sales tax, power tariff and cess on coal and gypsum, and royalty and cess on limestone.

Analysts say the reduction in duties will bring down prices by around 10-15 rupees per 50 kg bag at 35 percent and 55 percent abatement respectively.

Currently, an excise duty of Rs230 per tonne is levied for bagged cement upto 190 rupees per 50 kg bag, and  an 8 per cent duty is levied for retail prices exceeding 190 rupees.