Indian sugar mills association

Mill want VAT scrapped

Date:	17 Nov 2011

Source:

Reporter:

News ID:	695

Pdf:
Nlink:

Hyderabad, Nov. 16: With pressure for increasing sugarcane price mounting, the South India Sugar Mills Association (SISMA) wants the Andhra Pradesh Government to remove VAT (value-added tax) on sugar and increase tariff paid to co-generated power.

“Andhra Pradesh is the only State to levy VAT at 5 per cent on sugar sales in the State. This comes to Rs 135-135 a quintal, leaving us in a disadvantageous position vis-à-vis competition from other States. The Andhra Pradesh factories are forced to absorb VAT burden to face competition,” Mr Bhale Rao, Secretary of SISMA (Andhra Pradesh), told Business Line. The association has argued that large quantities of sugar are being dumped from neighbouring States. Ex-factory free sale sugar realisations are also lower.

Power tariff

Representatives of association said that power tariff is less than the fuel cost. The priced, fixed when cane price was Rs 500 a tonne, has not been revised despite the fact that payments for cane went up to Rs 2,000. They want the Government to allow co-generation units to opt out of power purchase agreements keeping in view poor pricing.

They also see poor demand for next year in the country. While the production is pegged at 2.6 crore tonnes for the season, consumption is expected to be only 2.2 crore. “If you take into account the carry over stocks, we anticipate a constant downward pressure on sugar prices,” a private factory executive said. The association wants the Government invoke AP Rural Development Cess Act and impose a cess of Rs 200 a quintal on sugar imports from other States. It also called for removal of export pass fee of Rs 2,500 a tonne on molasses. Dr J. Geeta Reddy, Minister for Sugar and Major Industries, said the State Government could consider all issues under their purview. — KVK

News

Navigation