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• The Cement Manufacturers' Association (CMA), the apex body of cement manufacturers in India in its pre-budget memorandum has asked the government to encourage cement industry and bring it at par with other core and infrastructure industries. The association also wants the excise duty rate be rationalized from 10% to 6-8%.A demand for duty structure to be simplified to be either on specific rate per MT or on ad-valorem basis and without relating to MRP etc has also been put forth.
• The CMA has put forth the following wish-list for the upcoming Union budget 2012-13.
• I. Uniform and Specific Rate of Excise Duty on Cement
• II. Customs Duty on Coal, Pet Coke, Gypsum & Other Inputs
• Pet-coke & Gypsum attracts 2.5 % duty and coal attracts 5% 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.
• III. Levy of Import Duty on Cement Imports
• 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.
• IV. Treatment of Waste Heat Recovery as Renewable Energy Source
• Energy cost is a very substantial part of the cost of producing cement. The prices of conventional energy resources are rising higher and higher and further, greater use of these is adversely affecting the environment. Also, various Govts are imposing renewable energy obligations on the industry.
• In view of this, the 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.
• V. Abolition of Import Duty on Tyre Chips
• Cement industry is an energy intensive industry and requires huge amounts of energy resources. However, it does not get adequate supplies of domestic coal and hence has to resort to expensive imported coal.
• To meet its requirements, the industry has been developing alternative energy sources like tyre chips etc. However, tyre-chips is presently put under the negative list of imports whereby the same cannot be imported into India.
• To increase supply of energy sources as well as for conserving the domestic energy sources it is necessary in the National Interest that tyre chips be allowed to be imported by removing it from the Negative list by reducing import duty on the same to ZERO.
• VI. Classifying Cement as "Declared Goods"
• 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.
• Other pertinent issues requiring support from the Government:
• 1. Support required from Govt. for Promotion of Cement/ Clinker Exports
• With capacity additions, the Cement Industry is facing a surplus capacity situation. However, cement exports are negligible and further going down. It is hence necessary to hold on to the export markets already developed and also develop more export opportunities.
• Towards this, it is necessary that the Govt provides incentives to sustain and promote exports of the cement industry. Export benefits such as Focus Product Scheme (FPS) are not allowed to cement industry. It is requested that FPS benefits be also allowed to the Cement Industry.
• 2. Duty Drawback benefits
• With substantial capacity additions having taken place in the cement industry, the cement industry is facing a surplus capacity situation. The present Duty Drawback rates of 1% do not cover the import duty content of imported items used in manufacture and thus adversely affects exports. Hence, to neutralize the incidence of import duties, Duty Drawback may kindly be enhanced to 3% (existing DEPB rates) to sustain exports.

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