The cement industry has sought for abolition of import duty on coal — one of industry’s indespensable requirement for manufacturing the building material.
Apart from coal, the 240-million-tonnes industry has also asked for similar cuts in duties in pet coke and gypsum. Currently, coal and pet coke attract an import duty of 5 per cent and top cement majors are dependent on imported fuel as indegenous coal is inadequately available. Industry opined that the finished product (cement) is being imported without any duty where as the cement makers have to pay import duty on inputs. “This leads to anomaly in which import duty on inputs is higher than the finished product,” said industry leaders.
In its pre-budget memorandum, the Cement Manufacturers’ Association (CMA), said, “ Due to short supply of indigenous coal, the main fuel, the cement industry has to depend on imported coal and pet coke.” It further added that gypsum also has a duty of 5 per cent.
Players such as Ambuja Cements, UltraTech Cement and India Cement are heavily dependent on imported coal for their requirement. At a time when most of the companies have set up captive thermal power plants and fresh projects are going onstream, coal has become the most important fuel for cement makers. According to the working group report for the cement industry for the current five-year plan (2007-12), the coal requirement will increase by 70 per cent to 58 million tonnes in 2011-12 from 35 million tonnes in 2007-08.
Last year, imported coal prices had reached as high as $180 a tonne. Currently, the international coal prices are trading close to $90 a tonne. The industry also has asked for removing differential excise duty structure on cement. “This is leading to confusion and unnecessary litigations.
It should be uniform,” said Hari Mohan Bangur, chairman and managing director of Shree Cement. At present, cement manufacturers are paying Rs 230 a tonne as excise duty in case the retail sale price of cement of 50 kg bag does not exceed Rs 190. Else, the excise duty is 8 per cent of the sale price.
