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Entry tax hike to raise cement prices in MP

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Shashikant Trivedi New Delhi/ Bhopal
Last Updated : Feb 05 2013 | 1:20 AM IST
Cement prices will rise in Madhya Pradesh because of the decision of the state government to hike entry tax on activities relating to procuring material other than purchase in local areas. The cement manufacturers will have to stump up more as entry tax in the state.
 
Reportedly, cement manufacturers in Madhya Pradesh had challenged a Section of the Madhya Pradesh Pravesh Kar Adhiniyam, 1976, which has been recently amended to impose increased rates of tax on activities other than purchase.
 
Till now, the state government could impose increased rates of entry tax only on "purchase" material.
 
"Cement manufacturers will have to pay increased rates of tax if they transport limestone procured from their own mines to other regions for cement manufacturing," a government document quoting the decision said.
 
Speaking to Business Standard on the telephone from Noida, an office-bearer told Business Standard the Cement Manufacturers' Association was not aware of the decision.
 
"Cement manufacturers and others normally declare material has been procured from their own sources or companies. They do not generally show the act of 'purchase' and thus state has to bear losses," the source said, adding, "there were similar provisions earlier also in the Act but we have now removed all anomalies and ambiguities".
 
Meanwhile, the state government has amended Section 4(a) of the Entry Tax Act, 1976, by bringing an Ordinance. The Cabinet has also given its nod to the decision.
 
The government levies entry tax at 1 per cent, which has been raised to 2 per cent on lime, limestone, clinker and dolomite.
 
"This rate is applicable to activities other than cement manufacturing," said a government official, while cement-manufacturing units are liable to pay 10 per cent entry tax on local area transportation of material.
 
The entry tax was introduced to remove octroi by various states and Madhya Pradesh was the first among them to impose the tax. But many other states have also been challenged by various manufacturers in court.
 
Madhya Pradesh produces 1.4 million tonnes of cement approximately with consumption touching 3,860,000 tonnes (2005).

 
 

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First Published: Jun 22 2007 | 12:00 AM IST

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