| Date: |
16-06-2015 |
| Subject: |
Telangana to levy entry tax on sugar imports |
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HYDERABAD: With stocks of sugar produced in Telangana piling up and not finding many takers, thanks to the neighbouring states supplying sugar at lower prices, the Telangana government is considering imposing entry tax on the imports.
Taking a cue from Punjab, which recently imposed 11% entry tax to boost the off-take from its own sugar producers, the Telangana industries department sent a proposal to chief minister K Chandrasekhar Rao to protect local sugar producers by removing VAT on their produce as well as levying entry tax on sugar from other states.
"There are two proposals on the proposed entry tax. While some officers are of the opinion that the entry tax should be five per cent like VAT, some officers suggested that it be 11% on the lines of Punjab. The government has already taken an in-principle decision to scrap VAT on (local) sugar," sources in the industries department said. The sugar producers in Telangana had been demanding the removal of VAT for quite some time.
Officials said that 10 mills in Telangana (three joint venture units of Nizam Sugars and seven private units) produce about 3 lakh tonnes of sugar a year. However, factories in neighbouring Maharashtra, Karnataka and Tamil Nadu have been dumping nearly 2 lakh tonnes of sugar in Telangana every year. These units offer sugar at a lesser price, resulting in lesser off-take of sugar produced in the local mills. Sources said that about 1.5 lakh tonnes of sugar are now lying idle with producers in the state.
With 200 sugar mills in Maharashtra, 40 in Tamil Nadu and 60 in Karnataka, these states record much higher production than what is required for local consumption. Further, against 10 kg sugar produced from every 100 kg crushed sugarcane by the mills in Telangana, the mills in the other three states manage to extract 13 kg sugar from a similar quantity of cane.
Export of sugar to Telangana is attractive for the mills in these states as they have to pay only the central sales tax and not VAT. However, the sugar mills in Telangana pay VAT of 5%, which works out to about Rs 150 for every 100 kg of sugar. The mills also pay a support price of Rs 2,600 per tonne of cane to farmers.
While by-products from sugar mills reduce losses of the industries to some extent, most mills in Telangana lack facilities to manufacture these products, including ethanol, power generation using bagasse and bio-fertilizer.
When contacted, commissioner of sugar and cane Bhadru Maloath said "the proposal to impose entry tax and scrapping VAT on sugar has been sent to the state government. The state government is likely to take a decision very soon."
Source : timesofindia.indiatimes.com
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