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Rising costs, taxes add woes to Andhra fly ash brick industry

Of the entire 16,000 fly ash brick-manufacturing units operating in the country, around 7,500 units are located in Andhra

VDS Rama Raju  |  Chennai/ Visakhapatnam 

Plagued by the imposition of various taxes, and rising raw material and labour costs, the Andhra Pradesh fly ash brick industry is witnessing a slow down with only 250 new units being set up in the state during the last two years.

Of the entire 16,000 fly ash brick-manufacturing units operating in the country, around 7,500 units are located in Andhra Pradesh. In the past, the state saw around 600 new units being established every year.

Speaking to Business Standard, N Kalidas, president, All India Fly Ash Bricks Manufacturers Association. said: "Some big industrial houses and new entrants have evinced interest to make fresh investments in this industry besides setting up large-capacity units (up to 100,000 bricks per day). However, due to the high excise duty, a majority of them have dropped their plans."

Currently, all the fly ash brick units having a turnover of Rs 1.5 crore are being exempted from paying excise duties.

Anything beyond this limit, all the units are liable to pay a 12 per cent excise tax. Due to this, only small-scale capacity units (up to 3 million bricks a year) are coming up in the state, he said.

With respect to Andhra Pradesh, he said the state government had been collecting a four per cent sales tax on fly ash bricks, whereas it has not imposed any such tax on clay bricks manufacturers.

Due to this additional tax burden, the fly ash brick industry, which is the most environment-friendly, is unable to compete with the clay brick industry, he added.

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First Published: Tue, June 18 2013. 20:29 IST