The cement producers need government initiatives that could increase cement consumption, which is only possible if the government abolishes federal excise duty on cement as it’s a punitive duty and curbs consumption, said a spokesman of All Pakistan Cement Manufacturers Association (APCMA) on Thursday.
The cement producers are thankful to the government for granting minor relief by reducing the federal excise duty from Rs 500 per tonne to Rs 400 per tonne in the budget for the financial year 2012-2013 but the actual reduction in excise duty felt short by Rs 150 per tonne as compared to the promised reduction and the market had already factored in a much higher relief.
In the federal budget 2012-2013, government has made a significant amendment by inserting section 153A to the Income Tax Ordinance, 2001. According to section 153A, the manufacturers shall collect 1.0 percent tax on gross sales price from their distributor, dealer or wholesaler. The proposed provision appears to be aimed at documentation of economy as well as broadening of tax base. However, this provision shall not only stress the cash flows of those distributor, dealer or wholesaler who are already paying final tax on their commission income but also impact the cement prices by Rs 4 per bag.
In the federal budget 2012-2013, the government has increased annual token tax on vehicle carrying goods from Re 1 per kilogramme (kg) to Rs 5 per kg. The impact of this increase comes to Re 1 per bag.
On the other hand, Ministry of Water and Power, government of Pakistan, vide its notification No 506(I)/2012 dated May 16, 2012 has increased the power tariff and its average impact to cement industry is Rs 1.7 per Kwh. Ministry of Water and Power also charged Rs 1.97 per Kwh as fuel price adjustment for the month of April 2012. The impact of these increases for cement industry comes to Rs 19 per bag. staff report
No comments:
Post a Comment