Different excise duty slabs will hurt growth momentum: FICCI
Apex chamber FICCI has said different slabs of excise tax rates imposed by government in the Budget would hurt the growth momentum of the sector.
By PTI |
NEW DELHI: Throwing its weight behind the cement industry, apex chamber FICCI has said different slabs of excise tax rates imposed by government in the Budget would hurt the growth momentum of the sector.
Criticising the government's move, FICCI in its post Budget Memorandum said in a free market economy prices of commodities are determined by market forces and charging 50 per cent additional excise duty on the MRP of Rs 190 per bag of cement tantamounts to uncalled intervention of the government in price regulation.
The chamber said import duty on the cement has already been brought down to the zero level and regulating prices in such an environment would deprive the Indian cement industry of a level playing field.
The total tax burden on the cement industry is around 51 per cent of the ex-factory realisation and with the increase in the excise duty, this would rise to 64 per cent making the industry one of the most highly taxed, the chamber pointed out.
FICCI said the cement industry has no control over the retail prices as it is charged by dealers and thus it could lead to under-invoicing, which cement manufacturers may find difficult to contain.
The excise duty component alone would now constitute 32 per cent of the realisation, much higher than highest slab of 24 per cent charged on white goods or other luxury goods, FICCI added.
At all India MRP of Rs 190, the average operating margins of the industry are expected to go down by the 8 to 9 per cent making the industry unattractive to the investment, FICCI further added.
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