While the Wholesale Sugar Dealers’ Association is on strike to protest the 5.5% value added tax (VAT) imposed on sugar, some wholesalers have taken advantage of the situation to book profits.
The price of sugar in the retail market has now jumped to R42 per kg from R32 per kg on July 25, when VAT was imposed.
The association went on strike from July 25 and claimed that no fresh stock was bought from sugar mills at the hiked rate.
“We have neither been buying nor supplying sugar to retailers since July 25 as imposition of VAT on the commodity is not the right decision; it will hit consumers hard,” said Pritam Singh, president of Jalandhar Wholesaler Sugar Association.
Pritam Singh, however, admitted that there were some “black sheep” among the dealers, who had stocked up on sugar, and were now selling it at a steep rate.
“A majority of the sugar dealers are not involved in the black marketing,” he said. “The main reason for the shortage is steep cut in the sugar quota of the central government to the state.”
When this reporter visited Gur Mandi and Basti Adda, where key godowns of sugar wholesale dealers are located, he learnt from sources that some of the facilities had huge stock of the commodity. However, the reporter was not allowed inside the godowns.
“The day VAT was imposed, most of the wholesalers made huge purchases to stock sugar for selling it at the already predicted high rate,” a source in the wholesale market said.
According to Pritam Singh, multinational retailers are the ones minting money by selling their stock, which they had bought directly from sugar mills in Uttar Pradesh.
When this reporter visited a multinational retail chain, he saw that a large stock of sugar, where earlier vegetables and grocery items used to be kept for sale.
“Although after imposition of VAT consumers have to pay Rs 3 to 4 more per kg for sugar, due to the strike, the price has shot up by Rs 10 per kg,” said Aparna Gupta, a homemaker.
The total per month sugar consumption in Punjab is pegged at eight lakh quintals, out of which 65 to 70% comes from other states.