LAHORE - The cement prices have increased by Rs15 per 50kg bag in retail market of the provincial capital on the plea of hike in Federal Excise Duty though it would be implemented from July 2018.

In retail market of Lahore, different brands of cement bags are available in the range of Rs535 to Rs570 per 50kg bag against their rates of last week of Rs525 to Rs545, showing a jump of Rs15 per 50kg bag on average during the last couple of weeks.

It is to be noted that the government in the federal budget has proposed rise in FED on cement sale by 20 percent to Rs1.5/kg.

Industry sources said that the net impact on manufacturers' cost will be around Rs20/bag as sales tax is levied on top of FED. They said the increase in FED is third consecutive times, as the government had increased the cement prices by Re1 per kilogram in the federal budget of 2016-17, which was increased to Rs1.25 in budget 2017-18 and now enhanced to Rs1.50 in budget 2018-19, affecting the common man who had humble resources for house building. Presently, there are three popular brands in Lahore market including DG Cement, Bestway Cement and Maple Leaf Cement which are selling in the range of Rs535-570 per 50kg bag as per their demand and popularity, dealers said.

The industry had suggested in its budget proposal that the Federal Board of Revenue should phase out the Federal Excise Duty to encourage cement off take. It said the cement industry was subject to FED at the rate of 5 percent of retail price and General Sales Tax at the rate of 17 percent of maximum retail price. These taxes account for about Rs100 per bag before fiscal year 2016-17.