CVD on cement imports may go

The countervailing duty (CVD) on cement imports is likely to go. The duty was reimposed in January to give relief to the domestic players and keep a check on the prices.

A decision is likely after the Lok Sabha elections.

The Builders’ Association of India (BAI) claimed that it had written to the Department of Industry Policy and Promotion (DIPP), asking for the CVD to be rolled back so as to keep prices in check. The DIPP is under the ministry of commerce and industries.

“We held a meeting with the commerce ministry officials on April 10 and it now looks like the government can consider a CVD roll back after the general elections are over”, said A Sahai, state coordinator for BAI in Delhi.

When contacted, NN Prasad, joint secretary, DIPP, declined to comment on the issue before the elections.

Currently, cement imports draw an 8 per cent CVD together with a 4 per cent special custom duty. As part of the second stimulus package, the government had lowered the excise duty on bulk cement from 10 per cent to 8 per cent in February. Besides, the CVD exemption was also lifted in January.

Domestic players, however, have raised the price of the commodity by Rs 3-7 per bag (1 bag = 50 kg) in the past three months buyoed by heavy demand triggered by the launch of some mass housing projects by state governments, along with roads and irrigation projects in rural areas.

Despatches have gone up by 9.15 per cent between January to March 2009 on a year-on-year basis, the data from Cement Manufacturers’ Association(CMA) showed. India imports nearly 100,000 tonnes of cement every month and most of it is consumed in Delhi and Punjab.

Cement imports from Pakistan have increased in the last one month, confirmed a Delhi-based importer.

Prices of the commodity could come under pressure in the coming quarters in Delhi and adjoining areas as Pakistani exporters quote a lower price to push the commodity into the Indian market.