INDIA BUSINESS WORLD - APRIL 2007
The Month that was ...

CEMENT IMPORTS MADE DUTY-FREE

The government has scrapped the 16% countervailing duty (CVD) and 4% special additional duty (SAD) on import of Portland cement. The Centre has also offered an olive branch to a combative domestic industry by resiling from its earlier refusal to review the dual excise duty structure imposed on cement in this year's Budget. "The government is open to it (revisiting the dual excise duty structure). Industry has been asked to get back with some concrete proposals on it. Once we get the proposals, we will examine the issue," Central Board of Excise and Customs (CBEC) spokesperson Hemambika Priya said at a press briefing here. The removal of CVD and SAD would bring down import prices by around Rs 25 to Rs 30 per 50 Kg bag, industry sources said.

But thanks to the high freight element in this bulk commodity's cost, cement imports may remain negligible even after the fresh round of duty cuts. In January, the government had scrapped the 12.5% basic customs duty on Portland cement as a measure to hold down rising cement prices. But prices continued to move up. The average price of cement had risen from Rs 165 per 50 Kg bag in January 2006 to Rs 209 per 50 kg bag in February 2007. The Budget then introduced dual excise duty rates on cement: Rs 350 per metric tonne for cement retailing at Rs 190 or less per 50 kg bag and Rs 600 per tonne for cement retailing for more than Rs 190 per 50 kg.