In order to protect the domestic sugar industry of Punjab, the state cabinet that met here today, has decided to impose an 11 per cent entry tax on sugar.

This would mean that the 15 lakh tonnes of sugar that enters Punjab from other states would not determine the retail price of sugar. Since the SAP or state advised price on sugar in other states like Uttar Pradesh is much less than Rs 295 per quintal SAP of Punjab, the cheaper sugar from other states floods Punjab markets and locally manufactured sugar ( at Rs 320 per quintal) has no takers.

The annual demand forsugar in Punjab is 60 lakh quintals of which 45 quintals are produced within the state.

The decision on imposing entry tax has been taken after the seven private sugar mills in the state approached the state government saying that they are suffering huge losses this year. It's not just the seven private sugar mills, but also nine cooperative sugar mills that have suffered losses this year. The losses of Punjab sugar mills because of fall in price of sugar is estimated at almost Rs 332 crore.