Sugar cess: Even as the GST council is all set to meet on July 21, Assam finance minister Himanta Biswa Sarma said that the Group of Ministers (GoM) will submit the final recommendations before the meeting. Notably, the Council had constituted a Group of Ministers (GOM) and authorised it to take the final call on the matter in the previous meeting. In its last meet on June 4, it was proposed that the new sugar cess will be over and above the existing 5 per cent GST on the commodity. The GoM has reportedly recommended 3% cess on sugar.
Himanta Sarma noted recently that after the Cabinet decision of fixing the minimum selling price at Rs 29, sugar mills have been able to add Rs 5,000 crore in their balance sheet. “Arrears have come down from Rs 23,000 crore to Rs 18,000 crore. Considering this kind of positivity, there is no need to impose cess,” he said.
Earlier, sources told The Financial Express that a cess of Rs 1-1.50 per kg of sugar would be adequate to ensure farmers get their dues on time and mills are in much better shape as well. Earlier, the food ministry had also written to the ministries of law and finance for advice if indeed such a cess could be levied on the GST. In fact, in a letter to food secretary Ravi Kant on April 13, Indian Sugar Mills Association (Isma) president Gaurav Goel has highlighted that mills are losing as much as `63 on purchases of each quintal of cane at FRP, based on the Rangarajan panel’s linkage formula.
The proposal to impose fresh cess on the commodity comes at a time when cane farmers are reeling under debt burden. The recent sugar prices crash has led to factories incurring losses, leading to poor payment to cane farmers.