• Monday, Aug 26, 2019
  • Last Update : 03:25 pm

Manufacturers demand reducing specific rate duty cement raw material

  • Published at 09:25 pm April 22nd, 2019
Cement factories
Photo: Syed Zakir Hossain/Dhaka Tribune

Currently, cement manufacturers pay Tk500 to import a ton of clinker

Cement manufacturers in Bangladesh are demanding a reduction in the specific rate duty (on imports) for clinker—the essential raw material for producing cement—to either Tk200 per metric ton, or a fixed import duty of 5%.

Currently, cement manufacturers pay Tk500 to import a ton of clinker.

Bangladesh Cement Manufacturers Association (BCMA) made the demand in a proposal letter sent to the National Board of Revenue (NBR) before the board formulates the budget for the upcoming fiscal year (FY2019-20).

According to the proposal, the cement industry has to pay higher import duties on raw materials compared to other industries.

"Usually, the government imposes 5% import duties on any basic raw material for industries, but the cement industry pays specific taxes higher than the 5%," reads the letter.

The BCMA said excessive taxes on cement raw materials went against government revenue policy and negatively affected cement prices.

The cement lobby added: "The country has been unable to produce [cement] raw materials, without which cement manufacturing is totally impossible. So, the taxation should be rational for survival of the sector."

Additionally, the proposal put forward four more recommendations, including: reducing value added tax (VAT) to 5% from 15% for raw materials; cutting advance income tax to 2.5% from 5%; and exempting regulatory duties for fly ash and import duties for cement bulk carriers.

Cement manufacturers urged the NBR to ensure the return of rebated advance income tax within 60 days, or pay fines in case of late payments.

They also urged the board to amend Rules 16 and 17 of the Income Tax Ordinance, 1984, so that cement companies can get 100% rebates, on a case-to-case basis.

The association said the sector has witnessed a 10–15% growth in cement production in the last couple of years, thanks to "the government’s policy support," which made the country "self-sufficient in the sector."

Speaking to the Dhaka Tribune, traders said they have already started exporting cement to neighboring countries, including India, after meeting domestic demand. 

Currently, investments of Tk40,000 crore are engaged in cement production, and around 2,500,000 people are directly and indirectly employed in the sector, according to BCMA data.

Apart from general infrastructure development projects, cement is in high demand for government projects, including the Padma Bridge, Dhaka Metro Rail, and the Rooppur Nuclear Power Plant projects.