Local cement manufacturers on Tuesday raised the price of cement by Rs 15 per 50-kg bag due to increase in the sales tax and excise duty. The federal government has raised General Sales Tax (GST) by one percent and Federal Excise Duty (FED) by Rs 150 per tonne on cement in the new budget.
While marking fee levied by the Ministry of Science and Technology is another additional tax factor, which is imposed at the rate of 0.1 percent of ex-factory price and if calculated in terms of rupee it tantamount to Rs 3 per bag. The FED on cement has surged to Rs 900 per ton from Rs 750 per ton and General Sales Tax to 16 percent from 15 percent in the budget.
Industry sources claimed that with an increase in the GST and FED, the tax impact on cement has risen to Rs 85 per bag from July 1, 2008, while earlier was stood at Rs 73 per bag. However, it is interesting to note that cement manufacturers had already increased cement prices by Rs 40-50 per 50-kg bag after the announcement of the budget.
While, on Tuesday (July 1, 2008), they once again has increased the price of cement by Rs 12-15 per bag to Rs 330 per bag in the domestic market, which previously was being sold at Rs 280-315. After the current surge in the cement prices the minimum price of cement has also increased to Rs 300 per bag in the local market.
Overall some Rs 50-60 per bag increase had been witnessed in the cement prices in the 25 days, as the cement prices stood at Rs 260-270 per bag in the local market in the first week of the June 2008. Dealers said that cement exporters are looking for new opportunities to export cement, as results local market is being effected its prices have gone up.
They said that on Tuesday local manufacturers have announced to raised ex-factory cement price by Rs 15 per 50-kg bag to Rs 315 per bag, which previously was stood at Rs 300 per bag. Some cement manufacturing companies have officially announced the new rates, while the rest companies have just informed us on phone, they added.
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