Costlier coal worries brick manufacturers

Published On: February 13, 2018 02:45 AM NPT By: Tekendra Basyal

KOHALPUR, Feb 13: The price of coal, which is used by brick entrepreneurs to fire their kiln, has increased by as much as 25 percent with the imposition Goods and Services Tax (GST) by India.

India introduced GST on June 30, 2017.

Yakun Teli, a proprietor of Two Star Brick Industry of Sonpur-2 of Khajura Rural Municipality, said that price of coal has climbed to Rs 25.5 per kg, from Rs 18.5 per kg, after GST came into force in India.

“Rise in the price of coal has increased our cost of production. It has made bricks costlier,” Teli added.

There are 55 brick factories in Banke and another 32 in neighboring Bardiya. These factories have been supplying bricks to over a dozen districts. 

“I had procured a container of coal at Rs 20,000 last year. Now, the cost has climbed to Rs 30,000,” Tufail Ahmad, proprietor of SK Brick Industry based in Nepalgunj-21, said. “We have long been hearing that Nepal has coal deposits in different parts of the country.

But no one is taking initiatives to make use of these coal mines,” he added.
He further said that Nepali businesspeople have no option but to buy coal at whatever price quoted by the Indian supplier. 

Brick manufacturers say that rising cost of production could force them to increase the price of bricks.

Meanwhile, investment in brick industry has increased by around 25 percent in recent years, according to Prakash Sah, president of Brick Industry Association, Banke. “The government should take a needful initiative to reduce the price of coal. “Though we cannot bring down GST imposed by India, the government can bring down customs duty to provide some relief to us,” he told Republica. 

According to Sah, brick factories of Banke pay around Rs 11 million in different taxes to the government annually. Brick factories of Banke and Bardiya produce more than 348 million bricks every year. These factories provide job to more than 34,000 people.    

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