New Delhi (PTI): The Centre may soon ask public sector trading firms -- MMTC, STC and PEC -- along with agri cooperative Nafed to import 10 lakh tonnes of refined sugar at zero duty by August and sell it in open market.
"The Cabinet yesterday decided to allow the four trading firms to import 10 lakh tonnes of refined sugar at zero duty by August and sell it in open market," a source said.
Even as the decision has come now, a PSU has already imported nearly 1 lakh tonnes of sugar, when international prices were low and is waiting for the notification to off load it in the market, the source said.
The import duty, which the cabinet has decided to scrap, will be calculated after the sugar is released from customs warehouses, a trader said. Currently, refined sugar attracts 60 per cent customs duty.
The Finance Ministry is expected to notify the decision next week, after approval of the Election Commission (EC), the source said. The Food Ministry had earlier taken the approval of the EC before sending the proposal to the Cabinet.
The PSUs will not have levy obligation on the imported sugar, nor they will require release order from the Food Ministry to off-load in the market, the source said. The stock limit order will also not apply to the imported sugar, he added.
The Cabinet has also decided to allow import of raw sugar at zero duty, which currently attracts 60 per cent duty. But this is different from the advance licence scheme (ALS), under which the government has allowed mills to import the raw variety at zero duty with the obligation of exporting equivalent quantity of refined sugar within three years.
"The ALS will also continue while under the new scheme there will be no export obligation," the source said.
Many mills in south India had requested the government to do away with export obligation so that they could import freely and run their plants.
So, far 14 lakh tonnes of raw sugar has been imported and more could come after the decision is notified, traders said.
It would facilitate mills to run their plants for some more time since many of them have closed down due to cane shortage.
The imported raw sugar, however, will have to be refined by mills and are to be sold as per release order.
Sale of sugar is controlled by the government through release order mechanism, under which Food Ministry allocates what quantity is to be sold by a mill in a month. The government also decides the monthly sugar quota for a state in case of supply through public distribution system.
The government hopes to keep a control on sugar prices, which are currently in the range of Rs 23-25 a kg. The rates have increased from a level of Rs 17-18 a kg in August last year.
Source : The Hindu