THE government is weighing options to impose a 20% duty on refined sugar imports whiles crapping a10% tax on purchases of the raw sweetener from overseas, food minister KV Thomas said on Thursday.

The proposals are aimed at promoting domestic refiners while discouraging inflows of cheaper white sugar. Currently, the government levies a 10% import duty on refined as well as raw sugar.

"There are different proposals before us. One is to increase import duty on white sugar to 20%. The other one is to bring down the import duty on raw sugar to zero. We are examining these proposals," Thomas said. Abolishing the import duty on raw sugar would facilitate the refining of the sweetener in the domestic market, generating employment, he added.

The proposals would be placed before the Cabinet Committee on Economic Affairs in the next 10-15 days after consultation with the ministries concerned, the minister said.

Separately, the minister said a committee under his chairmanship will be set up by the end of October to look into internal trade issues that could arise while implementing the foreign direct investment in multi-brand retail, which was cleared by the Cabinet last month. The Cabinet had approved a proposal to allow upto 51% of the FDI in multi-brand retail.

"We will set up a high-powered committee on internal trade reforms at the earliest by month end. We are working out the modalities, including the terms of reference," Thomas said, admitting that trade barriers between states are a complex issue and needs to be tackled in a systematic manner.

The panel will interact with state governments and other stakeholders concerned to come out with solutions to any potential problem with regard to the FDI in retail. “The government is open to address all issues facing small traders. We will consult all stakeholders once the committee starts its operations,” he said.

The minister said the Centre has been taking initiatives, such as encouraging states to abolish the APMC Act, to ensure smooth trade between different states, and the agriculture ministry is also bringing in a bill to cut redundant mandi tax and promote smooth inter-state trade of farm items.

The APMC Act bars farmers from selling produce in any other markets apart from the designated ones, among other draconian rules. Industry body Assocham has said the existing structure has fragmented the country into 28 state markets by tax barriers, which impacts competitiveness. It has called for establishing a national- level market by removing all barriers to trade, multiple and overlapping Acts and fiscal policies.