The government on Wednesday said the abolition of cess on sugar will come into effect from the day the goods and services tax will be rolled out.

The government plans to roll out the new GST regime on July 1.

Through the Taxation Laws Amendment Act 2017, the government had abolished 13 cesses, including the cess on sugar, the release said.

However, with the abolition of the sugar cess, the Sugar Development Fund is also likely to be dissolved, a government source had told Cogencis last month.

The government currently levies a cess of Rs. 124 per 100 kg on sugar mills, which is passed on to the consumers. The cess collected goes to the Sugar Development Fund, managed by the food ministry, for modernisation, rehabilitation, and expansion of mills.