LAHORE - The price of the 50 kg cement bag likely to shoot up by Rs 85 to Rs 395 straightaway following the increase of Federal Excise Duty and General Sales Tax on cement industry right at the advent of new fiscal year by July 01, it is learnt. The Federal government has increased Federal Excise Duty to Rs. 900 per ton from earlier Rs. 750 per ton and General Sales Tax to 16 percent from earlier 15 percent in Federal budget 2008-09. Marking fee levied by Ministry of Science & Technology is another additional tax factor, which is imposed at the rate of 0.1 percent of ex-factory price and if calculated in terms of rupee it tantamount to Rs. 3 per bag. At present bag of cement being sold at Rs. 305 to Rs. 310, as the retailers have already exploited the situation before the implementation of budget announcements. According to calculations, the cement industry has been burdened by provincial levies including Provincial Excise Duty and Royalty per ton on raw material, ranging between Rs3 to Rs5 and Rs10 to Rs30 respectively besides the Federal taxes and levies. The calculations shows that total impact of both provincial and federal levies has been designed as Rs. 73 per cement on 50 Kg bag before the budget speech, however, increase in excise duty and sales tax has skyrocketed per bag impact to Rs. 85 instantly. It is interesting to note that Pakistan' cement industry is paying highest tax per bag of cement in the region, including India, Afghanistan, Dubai, Sri Lanka and Iran. A tax comparison of regional competitors show that impact of taxes on each bag of cement in India, Afghanistan, and Sri Lanka is Rs. 45, Rs27 and Rs. 52 respectively while there is zero tax on cement industry in Dubai and Iran. The industry sources pointed out that high taxation anywhere in the world in ended up on high tax evasion. They said that the FBR has already expressed concern over reduction in sales tax revenue by 33pc during fiscal 2007-08. The industry circles, on the other hand, are of the view that the cement industry is involved in a continuous process and any kind of tax evasion is not possible, though they do not rule out the phenomenon at all. However, so far as reduction in sales tax revenue during current fiscal is concerned, the industry sources hold depressed market rates responsible for reduction in sales tax revenue owing to the factors beyond industry's control including high input cost, hostile attitude of regulators and a strong media trial. These circles have stressed the point that the cement is not a luxurious item that government is putting this industry under the burden of heavy taxation. They are of the view that government should immediately withdraw excise duty and bring it to zero level, as it was decided in 2003. However, sales tax can be continued as a single tax on industry. Such a radical step becomes a strong need of the hour especially when cement industry exports are likely to touch $1b  mark by next fiscal.