Cement costlier in Himachal than in Haryana & Punjab

Cement is manufactured in Himachal but double taxation has made this vital construction material in Himachal costlier than in neighbouring states. The state has major cement manufacturers like Adani Group owned Ambuja Cements Limited and ACC Ltd, besides Ultratech Cement plants at Darlaghat, Nalagarh and Bagha in Solan and Barmana in Bilaspur.

A bag of cement costs Rs 450 to Rs 490 in the state while it is available for Rs 390 to Rs 405 in Haryana.

Cement attracts the highest Goods and Services Tax (GST) of 28 per cent. This is in addition to the state-level levies like the Certain Goods Carried by Road (CGCR) Tax and the Additional Goods Tax (AGT) charged by the Himachal Government. “The state-level levies have not been subsumed in the GST and the manufacturers have been subjected to double taxation,” rues a cement producer.

The CGCR Tax was increased from Rs 7.50 per 50 kg bag to Rs 11 per 50 kg bag in September last year. The CGCR Tax on the transportation of clinker is Rs 120 per tonne up to 250 km while on cement, it is Rs 220 per tonne up to 250 km and double for a farther distance. The CGCR Tax is also charged on limestone, which is a major raw material for cement.

Besides taxes, an abnormally high freight of Rs 10.50 per tonne per km being charged by transporters adds to the high cement price. Successive state governments have failed to rationalise these rates.

The state government notified freight for cement for government works is Rs 8.35 per tonne per km but truckers charge Rs 10.50 per tonne per km from others. In Punjab, the freight is less than half, says an official of a key cement manufacturing firm at Darlaghat.

Higher freight has been an issue of concern for the manufacturers and successive governments have dithered on taking steps to rationalise it, fearing electoral loss. “The cement price is slated to rise further with the power tariff increasing by Rs 1.20 per unit from October 1. The revised tariff is as high as Rs 7.72 per unit, which is the highest in the industry. The cement industry also pays the highest electricity duty of 16 per cent,” adds the official.

The cash-strapped government can ill-afford to lose revenue incurred from the sale of cement though it will hit government housing schemes where limited funds are given to eligible people to construct houses.

Double taxation, high freight

• Cement attracts the highest GST slab of 28%.
• This is in addition to state-level levies like the Certain Goods Carried by Road (CGCR) Tax and the Additional Goods Tax (AGT) charged by the state government
• Besides taxes, an abnormally high freight of ~10.50 per tonne per km being charged by transporters adds to the high price of cement