In the latest attempt to contain inflation, the government today made cement imports duty-free. It also indicated its willingness to remove the dual excise duty structure on cement announced in the recent budget.The government has also abolished with immediate effect the countervailing duty of 16% on 65% of the import price and 4 % additional customs duty on the remaining 35% of portland cement, which is widely used in construction. The countervailing duty has been removed to make cement imports cheaper so as to contain domestic prices.At the moment, cement imports are insignificant. The duty cut is expected to increase cheaper imports, thereby increasing supplies.Meanwhile, the government has kept an open mind on rolling back the dual excise duty structure, said Hema Ambika Priya, spokesperson, Central Board of Excise and Customs.In turn, domestic cement companies have been asked to come up with proposals to reduce prices, which were raised on March 1, and help curb inflation which has remained at 6.46% for several weeks.Cement prices have been rising in the course of last one year. The average price per 50 Kg bag rose from Rs 165 in January 2006 to Rs 209 in February this year and subsequently to Rs 220.With an eye on keeping prices in check, the Finance Ministry had fully exempted basic customs duty on portland cement in January. The north block has asked the industry to moderate prices in cosumer interest. However, industry feels that prevailing high prices are a consequence of a demand-supply mismatch.The domestic industry, however, is not happy with the latest move."The industry did not anticipate such a move. We are yet to understand the implications of this announcement," said H M Bangur, vice president of Cement Manufacturers Association and chairman and managing director of Shree Cements."We suspect if the domestic port infrastructure would be suitable for large-scale cement imports even if there is a price parity," an industry official said.Other sources pointed out that if such (duty) concessions were given to the domestic industry even they could have reduced prices.
