Cement Prices Raised Following GST Rate Changes: Dharmani

The state has incurred an estimated loss of nearly ₹1,000 crore due to the GST Council’s decision to reduce tax rates, Urban and Town Planning Minister Rajesh Dharmani said on Sunday.

Defending the government’s move to raise cement prices by ₹5 per bag, Dharmani said the increase was necessary given the financial impact of GST rationalisation. “The state is already grappling with natural disasters, and the GST Council’s rate cuts have resulted in a direct loss of around ₹1,000 crore,” he noted.

Dharmani pointed out that under the earlier VAT regime, before GST was introduced, state revenues were growing at around 16 percent annually. “Since the implementation of GST in June 2017 and subsequent rationalisation, revenue growth has fallen to just 7–8 percent,” he said.

He added that while GST slab reductions benefit larger states with higher consumption, smaller states such as Himachal Pradesh, Jammu & Kashmir, Uttarakhand, and those in the Northeast have suffered losses. “Himachal simply does not have the resources to absorb this impact. The GST Council’s decision to cut the tax rate on cement from 28 percent to 18 percent has further strained the state’s finances,” Dharmani said.

He stressed that following the Council’s meeting, the state faced a direct revenue loss of nearly ₹1,000 crore, whereas the government had increased cement prices by only ₹5 per bag in response.