India calls for reduced VAT on cement

India calls for reduced VAT on cement
Published: 17 January 2011

The cement industry last week submitted its pre-budget memorandum 2011-12 to the finance ministry, where it requested the government to bring the value-added tax (VAT) on cement on a par with other building materials like steel in the Budget and scrap import duty on coal, pet coke, gypsum and other fuels.

While steel attracts 4 % VAT, for cement it is as high as 12.5%. Industry players argue that since both the materials are used for construction, cement should be given a level playing field to that of steel.

“Though cement is the most essential infrastructure input, the tax on cement is the highest among the items required for building infrastructure. The total government levies and taxes on cement constitute 60% or more of the ex-factory price,” Cement Manufactures Association (CMA) said in a pre-budget memorandum to the finance minister Pranab Mukherjee.