Cement makers want excise duty cut in Budget

Cement manufacturers have asked the Govt to reverse last year's hike in excise duty in Budget 2004.

Cement manufacturers have asked the Government to reverse last year's hike in excise duty in Budget 2004-05, which is due to be released on Thursday.

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The Cement Manufacturers Association (CMA) said cement is the most heavily-taxed infrastructure input in India, with Government levies comprising over 80 per cent of the ex-factory price.

This rate of taxation is the highest in the 17 countries of the Asia-Pacific region, it said.

Last year, the Government hiked excise duty on cement by 14.3 per cent to Rs 400 per tonne.

India is the second-biggest cement consuming market in the world after China, but there is little price discipline as the industry is fragmented, with as many as 54 companies making the commodity.

Cement production totalled 117 million tonne in the fiscal ended March 2004 while consumption was 113.8 million tonne, up 5.8 per cent from a year ago.

Demand is expected to grow as the Government has said it will focus on infrastructure projects. Demand is also expected to be boosted by higher growth in one of the world's fastest-growing economies.

CMA said the Government should aim to speedily construct rural roads with concrete and expedite work on various ongoing road projects aimed at connecting large cities.

The industry body has urged the Government to exempt all the cement used in roads from payment of excise duty and sales tax. It has also asked the Government to curb entry tax levied by state governments on the commodity.

The cement industry has asked that no electricity tax be levied on captive generation on power.