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Rediff.com  » Business » Reduce excise duty on AAC to boost the green building sector

Reduce excise duty on AAC to boost the green building sector

By Manish Tiwari, CEO, Biltech, an Avantha Group Company
July 09, 2014 10:46 IST
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ReutersHighlights of budget expectations

  • Fully implement the Energy Conservation Building Code
  • Reduce excise duty on AAC
  • Tax credits to incentivise optimal usage of fly ash and water conservation
  • Abolish MAT wherever necessary
  • Grant infrastructure status to the industry

Please click here for the Complete Coverage of Budget 2014 -15

Expectations from Budget 2014-15

We in the green building sector have high expectations from the forthcoming budget 2014-15. The Avantha Group and Biltech Building Elements Ltd have always stood for energy conservation in building modern and contemporary building structures and we hope the budget will initiate far reaching policy changes in that direction. The following are the policy interventions that we expect from the government in the 2014-15 budget:

  • Follow through with the Energy Conservation Building Code. This was ushered in by the Bureau of Energy Efficiency in 2007 but with the 2017 deadline fast approaching, many states like West Bengal are yet to notify it. This is a critical area as we believe these norms when implemented will reduce energy demand by a whopping 25 pct in new buildings as compared to the older ones. And with the increasing focus on urbanisation that the government plans to undertake, it would also be prudent to optimise energy efficiency and incorporate these specifications in the design stage itself. As these norms can only be implemented by a state government notification, we urge the federal government to follow through with the states who have not yet notified and usher in a golden period for sustainable building materials in India.
  • Reduce excise on AAC. Due to its eco friendly properties and energy saving capabilities, it will be a big boost to the green building sector in India is the excise rate on AAC (pre-fabricated blocks) which is current taxed at the peak rate off 12.36% be reduced to at least 8%. This will provide a shot in the arm for the sector and enhance its market footprint and sustainability in India.  Wherever applicable, we propose that MAT not be levied and excise concessions should be extended atleast for the next 10 years.
  • Incentivise water conservation and fly ash usage. We at Biltech Building Elements Ltd place a great deal of emphasis on water conservation and optimum use of fly ash, the critical input material needed for manufacturing AAC. In this regard, it will help if the government, in the current budget incentivises efficiency in water usage and fly ash optimisation through tax credits and progressively moving towards a traded market for energy efficiency credits.
  • Grant formal infrastructure status. Infact, with infrastructure creation and development at the heart of the new government’s job creation strategy, granting formal infrastructure status to the green building sector and enforcing the green design norms will help enhance infrastructure creation and capex movement in a big way.

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Manish Tiwari, CEO, Biltech, an Avantha Group Company
 

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