Indian ceramic tile makers have asked the government to cut taxes on tiles and reduce import duty on raw materials to boost demand and improve competitiveness of the Rs. 2.5-billion ($521 million) industry.
The industry, in a submission to the Finance Ministry, has said the government should allow a 50 per cent deduction for costs from the retail price of tiles compared to 45 per cent now before imposing an excise or production tax on them.
It said a cut in taxes would make the tiles more affordable to rural consumers where the use of ceramic tiles is low due to higher freight costs.
The Finance Minister will present new tax proposals in the Union Budget for the next financial year that is expected to be presented in February.
The industry said both tiles and the raw materials used in them attract the same import duty of 30 per cent, the current peak rate. But raw materials should attract a lower import duty of 20 per cent than finished products, it added.
Sales of ceramic tiles have risen nine per cent this year, helped by a housing construction boom which has been fuelled by attractive tax breaks on interest on home loans.
But the industry says this has a potential to grow even faster considering that per capita consumption of tiles in nations like Indonesia and Malaysia is 10 times higher than in India.