Sunday, May 05, 2024
Bangladesh Cement Manufacturers Association (BCMA) has urged the government to reduce the customs duty on ‘clinker’ and other four main raw materials of cement industry. The business organisation has requested to reduce the time of limestone sample testing.
The main raw materials of the industry--clinker, slag, limestone, fly ash, and gypsum, are almost entirely reliant on imports, constituting nearly 100 per cent. These essential materials have been subjected to excessive taxation, surpassing their actual import costs on numerous occasions, cement manufacturers said.
Traders are procuring clinker within the price range of $46 to $50 when importing it. However, officials at Chittagong Custom House (CCH) are imposing an import price of $60 for clinker, leading to increased expenses for traders due to higher import duties on raw materials.
Similarly, other raw materials utilized in cement production, such as those sourced at $24 to $26 per ton, are subjected to an estimated tariff price of $30 per ton.
Additionally, gypsum, imported at $27 to $28 per ton, is being taxed at a fixed price of $35 per ton by customs authorities. In light of these issues, businessmen have submitted a proposal to establish the price of clinker at $50, slag at $26, limestone at $19, fly ash at $30, and gypsum at $30 per ton.
Meanwhile, the limestone, a vital raw material for cement production, is facing significant delays of seven to eight days in the sample testing process. As a result, traders are incurring additional expenses as their ships remain inactive at the port during this prolonged waiting period.
BCMA President Md. Alamgir Kabir wrote a letter to Chittagong Custom House Commissioner that cites the cement industry is currently facing an acute crisis primarily driven by a combination of factors, including a foreign exchange crisis, challenges in obtaining credit for imports, escalating costs of fuel oil, gas, and electricity, and a noticeable decline in demand, all of which have culminated in this dire situation.
Under these circumstances, the BCMA president urged for a simplification of limestone taxation and alignment of the tariff price with the import cost of raw materials.
In the letter, Alamgir Kabir proposed to seek an undertaking from the cement manufacturing companies or their representatives to ease the taxation process of limestone.
Speaking to The Business Post, Mohammad Fyzur Rahman, Commissioner of Chittagong Custom House said, “Recently, a delegation led by the president of BCMA visited the custom house and submitted their demands in written form. We are currently examining the matter thoroughly.
Our approach aims to uphold a consistent tariff structure, ensuring equal opportunities for all importers without granting any undue advantages. The import price of cement clinker, unlike other standardized products, lacks a fixed benchmark, making it challenging to ascertain its true value since different countries sell it at varying prices.”
To establish a level playing field in the market and offer equal opportunities to all stakeholders, we have set the tariff at the current rate. This approach seeks to maintain fairness and transparency in the import process, he added.
