Cement Prices Rises By Rs 12/bag

Retail prices of cement have risen Rs 12 per bag with effect from March 1, 2007 nullifying the finance minister’s move to curb prices by linking excise duty to a higher rate. Prices of cement hovered around Rs 250-255 per bag (Mumbai) at the retail level compared with Rs 240-245 on February 29, 2007, confirmed city-based cement stockists. Excise duty on cement, which was Rs 408/tonne irrespective of the retail price of the commodity, has now been linked to the retail price. Duty has been hiked 50pct to Rs 612/tonne if the retail price exceeds Rs 190/bag and lowered to Rs 350/tonne if the MRP is Rs 190 or lower, as per the differential duty structure proposed in the Budget. Though the new duty structure was ushered in to rein in the prices of cement by acting as an incentive to cement manufacturers to control prices, it has had the opposite effect. However, industry insiders feel that the government may have foreseen the price hike and the real intent of the duty hike is to burst the real estate bubble that built up in the country over the last two years.

Courtesy: 99acres.com