Will GST have an Impact on the Cement Industry?

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Will GST have an Impact on the Cement Industry?

• Developed By SAG INFOTECH

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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.

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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.

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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.

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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.

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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

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