GST slash on cement offers relief, but consumers still pay the price

In a major relief to consumers, the Goods and Services Tax (GST) Council has reduced the tax rate on cement from 28 per cent to 18 per cent, a move expected to lower costs by about 10 per cent. Consumers in Himachal Pradesh, including realtors, are anticipating a price dip of Rs 15 to Rs 25 per bag.

An official from a leading cement manufacturer, however, clarified that while the council’s announcement is under review, a final decision on retail price cuts is yet to be taken.

Despite being a major cement-producing state, Himachal Pradesh continues to witness higher cement prices compared to neighbouring regions. A 50 kg bag of cement currently costs between Rs 436 and Rs 490 in the state, while the same is available at Rs 390 to Rs 405 in nearby states.

Industry experts blame a mix of state-level levies and unusually high freight charges for the price disparity. The state continues to impose the Certain Goods Carried by Road (CGCR) Tax and the Additional Goods Tax (AGT), which were not subsumed under GST. The CGCR Tax was hiked in September 2023 from Rs 7.50 to Rs 11 per 50 kg bag. Additionally, it levies Rs 120 per tonne on clinker and Rs 220 per tonne on cement for transport up to 250 km, with the rate doubling beyond that distance. Even limestone — the key raw material — faces this levy.

Freight charges also remain abnormally high, at Rs 10.50 per tonne per km, further pushing up costs. Successive governments in Himachal have failed to rationalise these rates, leaving consumers burdened despite the Central GST relief.

Major cement players such as Adani-owned Ambuja Cements and ACC Ltd, along with Ultratech Cement, operate large plants at Darlaghat, Nalagarh, Bagha (Solan) and Barmana (Bilaspur), yet the state remains one of Himachal Pradesh markets for cement.