India: A 4% rise in the entry tax on clinker in the Indian state of Assam has riled local cement producers. In the state budget, chief minister Tarun Gogoi had proposed to raise the entry tax on clinker from 2% to 6%, applicable only to small and medium units.
Industry sources quoted by the Telegraph of India said the proposal to raise the entry tax would adversely affect small grinding units in the state. "Given the budget proposal, there is an apprehension that the small units might not be able to bear the additional cost burden and become unviable," said a source.
The total procurement of clinker from outside Assam is estimated at 1.8Mt/yr, of which 24 small units procure 475,000/t. The source added that these units had invested US$74m in the state, employing over 3000 people directly or indirectly.
However, two large cement manufacturers - Cement Manufacturing Company Ltd (Star Cement, CMAL) and Meghalaya Cement Ltd (Topcem, MCL) - have been exempted from the tax. CMCL and MCL have units at Sonapur and Amingaon in Assam respectively. The source added that these large units had invested up to US$92m in the state, creating jobs for about 600 people.
"The government has accorded mega project status to large cement manufacturers, exempting them from entry tax, but imposed the same on small units. This is contrary to its vision of development," said Dilip Goenka, director of KD Cement.
