By India Today Web Desk: With the central government keen to impose a cess of Rs 3 per kg on sugar, the Goods and Services Tax (GST) Council today approved a group of ministers to take a final decision on the matter. The new sugar cess will be higher than the existing duty under the GST regime. Currently, sugar attracts five percent GST.
This decision was taken in the GST Council meeting. Union Minister Arun Jaitley joined the meeting through video conference from New Delhi. After a meeting with state finance ministers, Jaitley said the GST Council has decided that a group of ministers should be constituted to take a final decision on imposition of cess to raise funds for sugarcane farmers.
Cess will be levied on the packaged sugar sold by the sugar manufacturing companies. The proposal to impose a new cess on sugar is aimed at providing relief to debt-ridden sugarcane farmers. Sugar prices have recently crashed and sugar mills have faced further losses, as a result, sugarcane farmers have been paid poorly.
The government expects to collect around Rs 1,540 crore which will be used to clear the dues of sugarcane farmers who could not be compensated by the damaged sugar factories. In Uttar Pradesh, Maharashtra and Karnataka, sugar factory farmers have to pay arrears of Rs 19,000 crore.
According to industry body Indian Sugar Mills Association (ISMA), sugar prices across the country have fallen by Rs 9 per kg in the last four to five months. Sugar mills are running at a loss due to huge arrears to the sugarcane growers. The total value of cane outstanding across the country was over Rs 18,000 crore as on March 15 this year.
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