New Delhi: Cement manufacturers' Association (CMA) on Wednesday demanded excise duty reduction on the building material to 6-8 percent from the existing 12 percent in the ensuing Budget.
"To encourage cement industry and to bring it at par with other core and infrastructure industries, the excise duty rate be rationalised from 12 percent to 6-8 percent," CMA said in a Budget memorandum to the Finance Ministry.
Excise duty rates on cement are one of the highest and next only to luxury goods like cars, CMA, the representative body of the cement manufacturers, said.
"Other core industries attract around five percent duty. Therefore, for growth of the cement industry, the government may kindly reduce excise duty on cement and clinker," it added.
Cement is one of the core infrastructure industries and it requires large-scale investments and capacity additions in view of the expected economic growth and projected demand for cement over the medium to long-term.
"It is well-known that today the industry suffers from excess of surplus capacity of cement in the country and cement market is on bearish trend," CMA said.
The industry association said though Cement is the most essential infrastructure input, tax on cement continues to be the highest among items required for building infrastructure.
"The levies and taxes on cement in India are far higher compared to those in countries of the Asia Pacific Region. Average tax on cement in the Asia Pacific Region is just 11.4 percent with the highest levy of 20 percent being in Sri Lanka," it said.
Indian Cement Industry has a total capacity of around 340 million tonnes as on March last year and ranks second in the world, producing quality cement that matches the world's best.
CMA also pitched for levying basic customs duty on the imports of cement or alternatively, import duties on goods required for manufacture of cement be abolished.
At present, import of cement into India is freely allowed without having to pay basic customs duty. However, all major inputs for manufacturing cement such as Limestone, Gypsum, Pet coke, Packing Bags etc., attract customs duty.
"Therefore, it is requested to provide a level-playing field, basic customs duty be levied on cement imports into India. Alternatively, import duties on goods required for manufacture of cement be abolished and freely allowed without levy of duty," it said.