Maharashtra govt may levy taxes on sugar meant for commercial use | mumbai | Hindustan Times
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Maharashtra govt may levy taxes on sugar meant for commercial use

You may soon have to pay more for chocolates, cold drinks and sweets. With the Maharashtra government mulling dual pricing of sugar to make up the difference between the cost of production and selling price, the prices of all these items will go up.

mumbai Updated: Mar 31, 2015 22:41 IST
Surendra P Gangan

You may soon have to pay more for chocolates, cold drinks and sweets. With the Maharashtra government mulling dual pricing of sugar to make up the difference between the cost of production and selling price, the prices of all these items will go up.

Heavy taxes levied on sugar meant for commercial use means a rise in prices of finished products. The sugar industry is going through a major crisis owing to a fall in crude oil prices and higher production of sugar at the global level.

Against the cost of production at Rs 3,200 a quintal, the ex-mill selling price of sugar is around Rs 2,050 a quintal. This leads means huge losses for sugar factories that have been demanding subsidies.

Apart from waiving off purchase tax, the government has announced de-control in the export of molasses, requesting the Centre to create buffer stock of 50 lakh metric tonne. It has also announced to release the power bills, which are due for three years, of the purchase of co-generated power from the sugar factories.

Co-operation minister Chandrakant Patil said apart from subsidies, the government was mulling the option of selling sugar meant for commercial use at a much higher rate.

“We are considering dual pricing of sugar to boost the industry. The selling prices for confectioners, cold drink and sweet manufactures will be much higher than that of sugar for domestic use. We will put forth this proposal in the all-party sugar conference scheduled on April 25 and 26 in Pune. A final decision will be made after that,” Patil said.

According to the industry sources, 75% of sugar produced in the state is used for commercial purpose, while rest is for domestic consumption.

“The option is not feasible as it would lead to a rise in prices of sweets and cold drinks, making them way more expensive than other states. Secondly, it will also be difficult to determine the quota for domestic use. It will also lead in black marketing of sugar,” the source said.

What happened at the assembly
The assembly witnessed uproar as MLAs from across party demanded a sizable package for the bleeding sugar industry. After the government expressed its helplessness to provide subsidies, members from the Opposition moved to the well, resulting in several adjournments. Even after chief minister Devendra Fadnavis’ announced the government was making efforts, the members could not be pacified.

The uproar further intensified when members from the treasury benches joined the Opposition, demanding a special package for soyabean, cotton and paddy for the losses Vidarbha, Marathwada and other parts of the state.