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CMA seeks imposition of duty on cement imports

India Coal Market Watch

December 21: The Cement Manufacturers Association (CMA) has urged Finance Minister Arun Jaitley to impose a duty on imports of cement and enhancing the duty on imports of clinker on the lines of the safeguard duty imposed on imports of steel.

In its pre-Budget (2016-17) memorandum to the government, the CMA said, on one hand,  the domestic cement industry is bleeding with more than 116 million tons of idle capacity and, on the other, the government is allowing imports of cement without levy of the import duty.

“Due to the impact of a lower rate of growth in all the global economies in recent times, clinker, a key raw material for manufacturing cement, is being dumped in India through imports from countries like China, Indonesia and Thailand,” the CMA said.

In this connection, the CMA pointed out recently, to save the steel industry the government has enhanced the import duty on steel as well as imposed a safeguard duty.

“To save the domestic cement industry, which is already reeling under extreme adverse conditions due to low demand, from further adverse impact, we urge you to take immediate and appropriate steps, on the lines of the reliefs provided to the domestic steel industry, by imposing an import duty on cement and enhancing the import duty on clinker besides imposing a safeguard duty on cement and clinker,” the CMA memorandum said.

The association also urged the finance minister to reduce the current taxation burden on the cement industry by at least 20 percent to 25 percent from the present level of 60 percent ex-factory price in the overall interest and growth of both industry and economy.

In addition, the CMA urged the government to reduce the excise duty on cement from the present 12.5% + Rs 125 per ton to between 6% and 8% and also rationalise the existing complicated structure of duty calculation.

As per performance data released by the Office of the Economic Advisor, Government of India, growth of the cement industry during 2014-15 was a 5.6%. 

During the current year (April-August, 2015), cumulative cement production registered a meagre 1.8% growth over 10.98% in the corresponding period of the previous year. 

“We may mention that this growth in cement demand is just a correction of the low growth witnessed in the last few years. However, the industry is now hopeful that cement demand is poised to get further momentum in the coming quarters owing to the government’s business-friendly policies and plans for heavy investment on infrastructure projects, creation of Smart Cities etc,” it said.