Will GST have an Impact on the Cement Industry? Developed By SAG INFOTECH

GST Impact on The Cement Industry The cement industry is a significant input to the infrastructure sector. Currently, the tax rate on cement industry is between 27 per cent and 32 per cent. The tax rate for the cement sector is required to decline at 18-20 percent under the GST regime. This important reduction in indirect tax on the cement industry is anticipated to aid the cement companies to save on their logistic costs, due to a rationalization of warehouses and lower transportation values. The warehousing and transportation sector includes revenue generation between 20 percent to 25 percent.

GST Impact on The Cement Industry The cement industry is aimed to grow at a CAGR of 11.14 percent in volume terms during FY 2011-FY 2017 and is anticipated to reach 407 million tons by March 2017. Leading cement manufacturers, such as Ultratech, JK Cement, and Shree Cement is expected to benefit from the new indirect tax reform in India.

GST Impact on The Cement Industry GST India is expected to have a positive impact on the cement industry and will also profit the strong admixtures manufacturing sector of the country. The cement industry is also expected to profit from lower costs of logistics. Overall, a reduction in cement prices is expected.

Managing Partner, Lakshmikumaran & Sridharan, V Lakshmikumaran said “Cement India is the second largest producer in the world and in the next 10 years, India can become the net exporter of cement and clinker. The main raw materials for cement are limestone, coal, and electricity. Limestone, for quarrying, the cement companies have to pay the royalty to the state governments and for coal, apart from the GST, there will be a levy of clean energy cess which is not available as a credit because it is not part of the GST regime subsumes. So, therefore, as far as the cement industry is concerned, these two factors will continue to be outside the GST and therefore, it has to be absorbed as the cost of the cement production.”

Conclusion Cement industry has been watching a fruitful conclusion after the implementation of GST as the tax rate is speculated to be lowered down while the saved cost will try to ease other expenses managed by the manufacturers. Overall there is a positive impact being assumed in the sector.      Read More Please Visit: GST Impact on the Cement Industry