1. Duty rates on cement are one of the highest and next only to luxury goods such as cars. Other core industries such as coal steel attract duty at around 5 per cent. Cement is one of the core infrastructure industries and has limited manufacturing capacity in view of the expected GDP growth and projected demand for cement over the medium to long term.
To encourage cement industry and bring it at par with other core and infrastructure industries, the excise duty rate be rationalized from 10 per cent to 6-8 per cent.
In addition, the duty structure be simplified to be either on specific rate per MT or on ad-valorem basis and without relating to MRP etc.
2. Pet-coke & Gypsum attracts 2.5 per cent duty and coal attracts 5 per cent duty, if imported, while there is no duty on cement import. This leads to an anomaly in that “Import Duty on inputs is higher than the finished product”.
Therefore, it is requested that Government may kindly scrap import duty on coal, pet coke, gypsum and other fuels. The cement industry is heavily dependent on imported Coal and Pet Coke due to short supply of indigenous coal.
3. Presently, import of cement into India is freely allowed without paying basic customs duty. However, all the major inputs for manufacturing cement such as coal, limestone, gypsum, petcoke, packing bags etc. attract customs duty.
It is requested that to provide a level playing field, basic customs duty be levied on cement imports into India.
Alternatively, import duties on goods required for manufacture of cement be abolished and freely allowed without levy of duty.
4. Energy cost is a very substantial part of the cost of producing cement, both in India and globally. The prices of conventional energy resources are rising higher and higher and is adversely affecting the environment. The state governments are imposing renewable energy obligations on the industry.
Looking at all the above, cement industry is putting up Waste Heat Recovery plants so as to derive more energy from the same energy resource. In a way, this is akin to green energy. All of this requires further capital investments.
To help the industry in its endeavor to produce more such environment friendly energy, it is requested that such energy generation be treated as Renewable Energy Source.
5. Cement industry is one of the basic and core infrastructure industries. However, unlike other similar industries/goods, cement is subject to higher rates of taxation.
It is requested that Cement be stipulated as “Declared Goods” under Section 14 of Central Sales Tax Act so that it is put on an equal footing with other core sector goods like coal, steel, crude oil, jute, cotton yarn etc.
6. Single Rate of GST : The central government has made proposal to the state government for dual rate under GST which would be brought to single rate over a period of 3 years.
However, it is suggested that single rate may kindly be introduced from the first year itself, so that all disputes/litigation towards classification can be avoided from first year itself.
7. The central government has been putting lot of emphasis on the use of Solar Power and as per the “National Solar Mission” there are plans to generate 20000 MW of Solar Power by the year 2020. With a view to achieving the above target, the central government in the Budget for 2010-11 had exempted all the Plant, Machinery ,Equipment etc. required for setting up of a Solar Power Plant, from levy of Excise Duty and Basic Custom Duty on these items was brought down to 5 per cent.
In view of the fact that the initial cost for setting up solar power plants is relatively higher when compared to other sources of energy, it is requested that the import of Plant, Machinery, Equipment etc. for this purpose be fully exempted from levy of Custom Duty.