NEW DELHI: In a bid to contain the rising prices of cement and increase its availability, the Central Government on Tuesday exempted imports of portland cement, barring white cement, from the twin levies of countervailing duty in lieu of excise as also the special additional customs duty of four per cent with immediate effect.

The relief, to benefit consumers, was deemed necessary as despite various steps to rein in cement prices failed to yield the desired results. The prices of cement which have been rising steadily during the course of one year soared from an average of Rs. 165 per bag of 50 kg in January 2006 to Rs. 209 a bag in February this year and further to Rs. 220 a bag in March following the presentation of the budget. In particular, the differential rates of excise duty imposed in the budget for 2007-08 by way of a reward and punishment tariff failed to stymie cement producers. In fact, even before the presentation of the Budget, the Government had made efforts to check cement prices so as to ease inflationary pressures.

For instance, in January, the Government had fully exempted portland cement from the basic customs duty. However, as prices continued to rule high, the cement industry was requested to moderate its prices in the interest of the consumer. The industry, in turn, expressed the view that the prevailing high prices of cement were a consequence of a demand-supply mismatch.

While the latest measure is expected to improve the supply situation, the Government has also invited cement manufacturers to come forward with proposals on ways to reduce prices.

The Government, according to an official statement here, is of the view that the cement producers — in the larger interests of consumers and for checking inflation — would take appropriate measures for moderating prices of the key construction material.

`Not to pressurise cement makers'

PTI reports:

The Central Board of Excise and Customs spokesperson, Hemambika Priya, denied that the Government move was aimed at pressurising cement makers to moderate prices.

It did not mean that the government would not have a rethink on dual excise structure in cement announced in the budget 2007-08, she said.

"We are not putting any pressure (on cement makers). The government is open to revisiting the dual excise duty structure,'' she said.

At present, imports are insignificant, the spokesperson said.

The CBEC spokesperson said it was yet to be seen how much supply would increase due to elimination of the duty.

"We have to wait and watch. But the government's intention is to bring it close to Rs. 190 a 50 kg bag.''

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