The Hindu : Sugar mills want tax retention for 2 years

Online edition of India's National Newspaper
Wednesday, Jan 08, 2003

Business

Business

Sugar mills want tax retention for 2 years

By Our Special Correspondent

CHENNAI JAN. 7. The Indian Sugar Mills' Association (ISMA) has urged the Union Government to permit sugar mills to retain in full for two years all Central taxes on the commodity to enable the industry to overcome the acute financial crisis facing it.

In a statement, the President of ISMA, S. V. Balasubramaniam, said the increase in the minimum price of sugarcane by Rs. 5 a quintal, announced by the Prime Minister, A. B. Vajpayee, on December 19, 2002, primarily as a drought relief measure, had added to the agony of the industry and would cause an additional financial burden of Rs. 1,080 crores over and above the Rs. 540-crore burden imposed on account of the first increase in the statutory minimum price of cane payable for the season 2002-03. "Indeed, all sugar mills, irrespective of sectoral status, have become vulnerable and may not be able to discharge their statutory obligation," he said.

Excessive production of sugarcane and sugar under the impetus of higher cane prices in comparison with other crops and the consequent accumulation of stocks, coupled with rapidly falling sugar prices had taken a heavy toll of the industry, Mr. Balasubramaniam said.

The president said to enable the industry to continue to play its due role, including timely disbursement of the statutory cane price to millions of farmers despite the unprecedented crisis, the Centre should permit mills to retain in full the basic duty of excise on sugar and molasses as well as the Central cess on sugar which was credited to the Sugar Development Fund. He pointed out that a similar scheme was in operation earlier to a limited extent to promote new capacity in the industry in a situation of tightly controlled costs and prices. Sugar mills were at that time permitted to charge and retain the excise duty to the extent of the new capacity created by way of expansion or installation of new units. Mr. Balasubramaniam welcomed the announcement made by the Prime Minister that the government would continue the mechanism of regulated releases effectively, to bring about stability in sugar prices. "The sugar situation has become so precarious that corrective measures need to be initiated immediately to save this important segment of the country's rural economy from ruination," he added.

Mr. Balasubramaniam also welcomed the announcement made by the Prime Minister that the government would continue effectively the mechanism of regulated releases of sugar. He hoped that measures would be initiated immediately to make this a reality not only to stem the fall in sugar prices but also to help the price reach reasonable levels.

He assured the government of the wholehearted support of ISMA for reinstatement of an effective mechanism of regulated releases.

Printer friendly page
Send this article to Friends by E-Mail

Business