ISLAMABAD (May 07 2003) : The government has decided to slash 20 per cent central excise duty (CED) on the cement in the next budget (2003-2004).
The move will expand economic activities attracting more investment in construction industry and create more job opportunities for semi-skilled and unskilled manpower.
The CED on cement would be gradually phased out in the next five years with annual reduction of 20 percent in the levy per year.
In this way, CED on cement would be completely abolished during financial year 2007-2008.
Official sources told Business Recorder here Tuesday that the Central Board of Revenue (CBR) would suffer an annual loss of over Rs 10 billion on total withdrawal of excise duty on cement.
The cement industry has demanded of the government to altogether abolish CED on cement being charged at the rate of Rs 1000 per ton.
However, immediate withdrawal of total excise duty would cause unbearable loss to the national kitty as cement is the major revenue spinner contributing Rs 9,950 million in 2001-2002 and Rs 10,701 during 2000-2001.
Keeping this in view, the CBR has principally agreed to gradually withdraw excise duty in five phases with annual reduction of 20 percent.
In the first phase, 20 per cent reduction would be made in the coming budget, which would give relief of around Rs 2.20 billion to the private sector.
Similarly, CED on cement would be gradually abolished in the coming years at the rate of 20 percent ultimately causing annual loss of over Rs 10 billion.
The duty would be totally abolished in 2007-2008 following above-mentioned step-by-step reduction in duty.
Sources added that the reduction of excise duty on cement would also reduce the overall value of sales tax being charged on cement brining prices down for the consumers.