Cement Manufacturer's Association pre-budget memorandum for 2008-09

30 October 2007

Mumbai: Secretary General of Cement Manufacturer's Association, the representative of the Indian cement industry, has proposed a wish-list of sorts to the finance minister for his consideration before he sets about his annual budget exercise.

Highlights of the associations' memorandum include:

Taxes and Levies
Cement is the highest taxed essential infrastructure input in India, with various government levies and taxes cumulatively making up around 60 per centor more of the ex-factory price.

These levies are very high when compared with 17 countries in the Asia Pacific (APAC) Region where the total average tax on cement is 11.4 per cent, with the highest levy of 20 per cent being in Sri Lanka.
 
The association has requested that central levies and excise duty on cement be reduced to input more affordable housing and infrastructure projects, and to level the playing field with international competition.
 
Excise Duty on Cement
The three – tier system of excise duty levied on cement in the Union Budget 2007-08, the association has requested for an abatement. The absence of the abatement, according to the industry body, results in a tax on trade margins, and a tax on tax.

This can be corrected by providing abatement on the excise duty levied on MRP. Such abatement is provided to all products where levy is linked to MRP.

The NCAER report of 2005 suggested an Abatement of 55 per cent for grey cement. White Cement receives an abatement of 35 per cent on MRP.
 
The association has requested for an abatement of 55% as per the NCAER report of 2005.