The CAGR of the industry in the last five years was around 4%.
With cement coming under the 28% tax rate structure under Goods and Services Tax (GST), the industry is not happy with the government slotting it under the highest tax structure as the sector is already struggling with low demand.
The Government has failed to take an advantage to spur growth in the already struggling housing and cement sector by placing the commodity in the uppermost tax bracket of 28% under the GST, the industry body Cement Manufacturers Association (CMA) said reacting to the announcement.
The industry body has also lamented that the taxation on cement, the highest in the Asia Pacific region, has impacted the health of the sector that is seeing just 70% of its capacity utilisation because of low demand.
“On a 50 kg bag of cement costing Rs.300, Rs.180 is tax plus cost of logistics. This is also an industry which is very capital intensive with low margins. GST was an opportunity to provide relief to the industry but has been missed,” Shailendra Chouksey, President, CMA told PTI.
Since the sector is ailing, putting the commodity in a lower tax rate would have cut down the prices which in turn would have benefitted the housing sector, the largest consumer, he added.
“Currently, the ‘housing for all’ scheme is a huge ticket for the Government and by cutting the prices of cement, an indication would have gone that it thinks about people,” he said.
....