Cement makers hit hard for additional duties

Al Amin :
The entrepreneurs of the country’s cement industry are counting huge losses as the customs authority imposed 30 per cent additional duty on import of limestone by changing Harmonized System (HS) code.
The sector has been facing tough times than ever for rising dollar prices, reluctance of banks to open import LCs and increase in transport costs for hiking fuel prices and the new supplementary duty on raw materials import has intensified the crisis further, they said.
NBR sources said that the entrepreneurs of the ready-mix factories imported limestone, key raw material of construction industry, in last two year by taking the chance of lower import duty and the country witnessed a big jump in import of it.
Following this, the National Board of Revenue (NBR) changed the HS code of the limestone last month to prevent the unusual facilities taken by the ready-mix factories.
As a result, the limestone importers are now paying additional 30 per cent Supplementary Duty (SD).
Earlier, the cement manufacturers used to pay Tk 803 as duty against importing per tonne limestone, but now they are paying around Tk1500 for this.
Getting relief from this, the Bangladesh Cement Manufactures Association (BCMA) sent a letter to the NBR on November 17 urging withdrawal of SD on importing limestone.
In the letter, BCMA Vice-President Md Shahidullah said, “10 to 20 mm size limestone is used in cement industry. Cement companies import limestone of this size for making cement. But, the customs houses are not considering limestone as raw materials of cement industry now. The sudden decision has made us surprised.”
Speaking at a press conference in a city hotel on Tuesday, BCMA President Md Alamgir Kabir demanded withdrawal of the newly imposed SD on limestone import.
He said that they had to pay 27 per cent as duty and taxes for importing limestone, but now they are paying 67 per cent.
“Besides, the manufacturers are now paying additional duties and taxes for importing other raw materials, necessary for cement production,” he alleged.
There are 37 active cement factories in the country and more than Tk 30,000 crore has been invested in the industry, according to the BCMA.
Manufacturers have a combined annual production capacity of 58 million tonnes against a local demand of 33 million tonnes. The industry employs 60,000 people directly and another one million indirectly.
But the belt-tightening in public spending and austerity in development expenditure in the country have hit the cement sector hard with a waning demand since 2021.
The opening of letters of credit (L/Cs) for import of clinkers and other raw materials for the key construction material has declined significantly, according to industry insiders.
They said the cement industry has been facing a death blow due to costly dollar and energy crunch too.
NBR data showed that nine large cement companies paid 8.22-per cent less Value-Added Tax (VAT) in last fiscal year (2021-22) than previous year.
Small companies are facing difficulty to continue import by opening L/Cs due to costly dollar, the entrepreneurs said.