The Group of Ministers (GOM) set up by GST Council has deferred its decision on imposition of cess on sugar at Rs 3 per kg over and above 5 per cent Goods and Services Tax. The GOM met in Mumbai on Sunday and the issue was likely to come up in the next meeting, a date for which was being fixed.
UP Finance minister Rajesh Agarwal attended the meeting in Mumbai as a member of the GOM. The state government has been pushing the case for imposition of cess on sugar to bail out the sugar industry in UP, which has been reeling under the impact of mounting arrears to cane growers.
Money collected through cess will be used to provide financial support to cane farmers. These farmers are having a tough time as they were not getting cane dues from mill owners, while the latter were saying that product prices were so low in the market that things have become difficult for them.
Joint Commissioner (law) of State Commercial Taxes Sanjay Pandey said in lucknow on Monday that the matter was discussed in the GOM but it remained inconclusive.
“The matter would be put up again before the GOM during its next meeting, but the date and venue were yet to be decided,” he stated.
Sugar mills in the state owe over Rs 12,700 crore to cane farmers for cane purchased during 2017-18 season. The state achieved a record sugar production this season of over 1.10 crore MT. The production caused a glut of sugar in the market leading to price crash. Against the cost of production of Rs 3,700 per quintal, the ruling price of sugar was hovering around Rs 2,600 per quintal.