200% duty on Pakistan cement cheers industry

Ambika Sharma

Tribune News service

Solan, February 27

The imposition of 200 per cent customs duty on the import of Pakistani cement, which hitherto attracted no duty, has benefited the domestic industry which was feeling the pinch of cheaper imported cement from the country.

The state produces 11.45 million tonnes cement annually. Major firms like Ambuja Cements Limited, Ultra Tech, ACC and CCI have their manufacturing units here.

Since the domestic cement manufacturers could not compete with the cheaper cement imported from Pakistan, they had failed to utilise their optimum manufacturing capacities. This development is expected to perk up the demand of domestic cement and will help the state as well as the Centre to gain more through taxes.

The state government imposes state specific levies like Certain Goods Carried by Road Tax and Additional Goods Tax on cement and an increase in its production will add to the state’s exchequer. Other levies like the social welfare surcharge, royalty, clean energy cess, environment and health cess and electricity duty will also help the government pocket more, said officials of the cement companies who are assessing the implications of this move.

A key cement unit, which has manufacturing plants in Punjab and Himachal, could utilize only 75 per cent capacity. As against 29.65 metric tonnes that it manufactured only 22.95 metric tonnes in the last financial year, said a unit official.

“During the last five years, the cement industry grew at 4 per cent rate where meager 65 per cent capacity utilization was registered against the long-term average growth rate of 8-9 per cent,” said a senior executive of a company.

He said cement was sold in Pakistan markets at $100 (per metric tonne) PMT and it was dumped in India at $63 to $65 PMT. The import of cement had attracted no basic customs duty since 2007. This caused the domestic cement industry to suffer.