Financial Daily from THE HINDU group of publications
Wednesday, Dec 28, 2005


Group Sites

Industry & Economy - Cement

Tamil Nadu set to abolish differential sales tax on cement

Our Bureau

Chennai , Dec. 27

THE Tamil Nadu Government is all set to abolish differential sales tax on cement. The Government had introduced the differential tax rates in 2002-03 to rein in cement prices.

According to sources, the move comes following representation from the industry that pointed to the 12.5 per cent tax rate levied in neighbouring States, which have all switched over to the VAT regime.

In the 2002-03 Budget, the Tamil Nadu Government decided to levy sales tax of 24 per cent for ordinary Portland cement and Portland Pozzolona cement exceeding selling price of Rs 145 and Rs 135 per 50-kg bag respectively. This selling price was to include sales tax.

The tax on second and subsequent sales for these categories of cement was fixed at 5 per cent. Cement sold below this price would be charged at 16 per cent sales tax.The Government's move then was aimed at controlling cement prices, which had reached levels of Rs 190 a bag.

According to reliable sources, the latest decision to reduce the sales tax to 16 per cent is because the Government is worried that there will be diversion of stocks as the neighbouring States charge a lower rate.

A Government notification on the new sales tax structure is awaited, according to the sources.

Cement prices are now ruling at Rs 165-170 a bag and there is expectation in the market that prices will go up from mid-January once demand picks up.

The cement companies were expecting sales to pick up from mid-December itself, but that has not happened because of the rains.

They anticipate a surge in demand from next month when more infrastructure and building projects get off the ground.

As it is, cement companies are working to almost full clinker capacity, according to industry sources.

More Stories on : Cement

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
'Public policy framework vital for productive employment'

2005 is second warmest year on record, says WMO
Auto sector: Having a successful run
CII asks for more reforms to achieve higher growth — Bets on manufacturing to deliver
`Fly ash blended cement enhances durability'
Tamil Nadu set to abolish differential sales tax on cement
Infrastructure growth down to 3 pc in Nov — Crude oil, steel, coal, electricity fare badly
Export orientation of manufacturing impacts excise duty collection
3 bulk drug prices revised downwards, three upwards
Organisation to improve energy efficiency formed
TN Chamber seeks early implementation of value-added tax
Radio ads mimic celebrity voices
`Explore your mind to become a good manager'
Global meet at Kongu college
`Academic curriculum does not meet industry expectations'
Rs 1-lakh prize for best engineering idea instituted
Delhi traders down shutters protesting demolition drive
Thermax in pact with Heavy Water Board for ammonia injection tech
Mines Ministry rejects plan to sell 5 pc Nalco stake to boost NIF — Will toe DoD line if proceeds are used to expansion
The year of `employee' for India Inc
Rice exporters unlikely to make offers till mid-Jan — Millers in AP more keen on meeting levy obligations
ECGC plans to tap `tough, but remunerative markets'
`Bird flu on national disaster list'

The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | The Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |

Copyright 2005, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line