The Tamil Nadu government today issued orders scrapping the dual sales tax system on cement and levying a uniform tax of 14 per cent on all grades of cement at the first point of sale. This is against the earlier rate of 16-24 per cent depending on the selling price. In yet another boost to the industry the government has waived the additional sales tax payable by any dealer and also exempted completely the surcharge payable by any dealer.
The notification has taken effect from January 2. Industry sources hailed the decision taken at the most opportune time when the cement consumption is at its peak in the state buoyed by the heavy flow of investment into housing, industrial projects and infrastructure. After returning to power, the AIADMK government in the in the budget for ‘02-03, introduced a dual ST on cement citing the steep increase in the price of cement from time to time.
It clamped a tax of 24 per cent for OPC and PPC cement exceeding a selling price of Rs 145 and Rs 135 per bag respectively. In addition, a surcharge of five per cent of the tax was levied on second and subsequent sales for the categories. The tax rate was retained at 16 per cent at first sale for those brands selling below these prices plus a surcharge of one per cent for second and subsequent sales. It removed the entry tax on cement including white and refractory cement.