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JK Lakshmi Cement wants the government to streamline excise duty structure on cement and reduce various duties levied on the key raw material for infrastructure projects.
Dr. Shailendra Chouksey, Whole time Director, JK Lakshmi Cement said cement faces a huge tax and the Government collects about `35,000 crore per annum. In fact, he added the total Government levies and taxes on cement account for about 55-60 per cent of the ex-factory price of cement.
Requesting the Government to accord ‘declared goods’ status for cement, he said, the economic slowdown in past couple of years and drop in Government’s spending on infrastructure has hit cement companies hard.
Giving declared goods status to cement will lead to significant reduction in the value added tax and put it on an equal footing with other sectors such as coal, steel, crude oil.
On complicated structure of excise duty, he said there should be a uniform rate of excise duty levied on the cement sector based on ad valorem rather than transaction value.
Currently, excise duty on cement is 12 per cent plus `120 a tonne. Earlier it was at a specific rate per tonne. It has now become ad valorem cum specific duty and is related to the declared maximum retail price of the product. For example, if MRP of cement is printed, then excise duty is 12 per cent advalorem plus `120 a tonne. The duty structure has caused lot of disputes.
The cement industry has demand rationalisation of excise duty and cut it to 6-8 per cent without addition of specific duty.
Due to inadequate availability of crucial inputs such as pet coke and gypsum, cement industry is forced to procure the shortfall through imports. Interestingly, companies pay a duty of 2.5 per cent on import of pet coke and gypsum whereas cement can be imported duty-free.
The Government should consider extending the deduction on income earned by an enterprise carrying on the business of operating, developing or maintaining any infrastructure facility to cement companies, said Chouksey.
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