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Excise hike on bulk cement to impact small, mini units

NEW DELHI: The proposed hike in excise duty of Rs. 400 a tonne or 14 per cent ad-valorem, whichever is higher, on bulk cement, and a higher duty on cement clinkers has not gone down well with the industry, which says the move may adversely affect mini and small cement plants.

Earlier, it was a flat excise duty of Rs. 400 a tonne in bulk cement. Finance Minister P Chidambaram, in his budget speech on Friday, proposed raising the excise duty.

Further, he also increased the excise duty on cement clinkers by Rs. 100 to Rs. 450 from Rs. 350 a tonne.

Reacting to the proposals, Ambuja Cements Managing Director A. L. Kapur told PTI that it (increased excise on cement clinkers) would adversely affect the mini and small plants, especially those in Uttarakhand and Northeastern States.

“... it will deter the companies to sell and set up clinker plants in backward States, like Uttarakhand and the North East. In one sense, concession given to set up clinker units in these States have been withdrawn,” he said.

Usually, independent clinker plants are set up in these States, which sell clinkers to cement manufacturers, he said.

However, the industry hailed the Budget 2008-09 as a “positive one” for the overall economic growth. — PTI

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