Tamil Nadu also levies a 5% value-added tax on sugar
The South Indian Sugar Mills Association has requested the Telangana government to lift the 5% value-added tax (VAT) levied on sugar in the state. Incidentally, Telangana and Tamil Nadu are the two states which levy 5% VAT on sugar. Further, the association has also asked the government to levy entry tax, on the lines of Punjab and Haryana of about 11%, as it claims that there is regular dumping of sugar into the state by Maharashtra and Karnataka.
Explaining the situation of cane production in the state, T Saritha Reddy, president, South Indian Sugar Mills Association (Telangana) and VP, Indian Sugar Mills Association, said that about 10 sugar factories in Telangana and three joint sector factories could not commence their operation due to financial problems. “We have a threat of sugar being dumped from neighbouring states like Maharashtra and Karnataka. At the same time, with low plantation, our cane is also being poached by factories in Maharashtra and Karnataka in spite of zones being allotted to mills,”’ she remarked. “
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We have approached the state government to help us continue paying good price to farmers, which can be ensured by stopping the poaching of cane from our state by Maharashtra and Karnataka or dumping the extra sugar produced by Maharashtra and Karnataka,”’ she said.
“The poaching can be stopped by setting up check points at borders so that the state will not lose revenue by way of taxes and duties. The dumping of excess sugar can be stopped by imposing entry tax or agricultural cess as we have requested so many several times at various levels in the state government. Besides, we are the only state besides Tamil Nadu to be paying VAT on sugar sales,” she added.