Cement production will grow further in the country as the Union Budget 2013 has given a boost to infrastructure spending in the areas of road, irrigation and low cost housing. This cement sector has borne the brunt of low demand from both retail as well as the wholesale segment.
At a time when raising prices is difficult, a hike in diesel prices and higher railway freight rates have piled on the agony for cement companies. Therefore, cement firms expect excise duty on cement to remain stable in order to keep margins intact. Cement manufacturers' Association (CMA) has asked for an excise duty reduction on the building material to 6-8 per cent from the existing 12 per cent in the ensuing Budget.
Excise duty rates on cement are one of the highest and next only to luxury goods like cars, CMA, the representative body of the cement manufacturers, said.
The industry association said though cement is the most essential infrastructure input, tax on cement continues to be the highest among items required for building infrastructure. At present, import of cement into India is freely allowed without having to pay basic customs duty.
However, all major inputs for manufacturing cement such as limestone, gypsum, pet coke, packing bags etc attract customs duty.