Bihar to reduce taxes on crushing of sugarcanes in a bid to help sugar mills

Assurance to the effect came during a meeting between a BSMA delegation and sugarcane industries minister Pramod Kumar on Saturday

The Bihar government has proposed to reduce taxes on crushing of sugarcanes in the current fiscal to help tide over a financial crisis threatening closure of several sugar mills. The relief will be offered by way of reduction in commission to the regional development councils and partial waiver in the Goods and Services Tax (GST).

Sugarcane producing states such as Uttar Pradesh, Punjab and Haryana fix their own sugarcane price called ‘state advisory prices’ (SAPs). (Bloomberg file photo)

“The government has agreed to reduce the regional development council commission on crushing of sugarcane to 0.20% from the existing 1.80% of the amount,” said Bihar Sugar Mills Association (BSMA) secretary Naresh Bhatt.

He said the state sugarcane industries department had also given assurance to waive off tax on the purchase of sugarcane after implementation of the GST on crushing of sugarcane. He further claimed that the department has also decided to increase the minimum support price (MSP) on all varieties of sugarcane by ₹5 per quintal. The mills would purchase the best quality sugarcane from farmers at ₹ 315 per quintal at the mills’ entrance, while the medium quality would be paid ₹295 per quintal. The lower quality of sugarcane would fetch ₹272 per quintal to the farmers, he said, adding that the millers have been authorized to purchase sugarcane from the farmers from the field or market at ₹20 lower than the MSP at the mills’ gate.

Assurances to the effect came during a meeting between a BSMA delegation and sugarcane industries minister Pramod Kumar on Saturday.

The sugarcane industries department faces the challenge to revive sugar mills, which are on the verge of closure due to financial stress. Currently, only nine out of 28 sugar mills are operational, while the rest have been closed due to various reasons.