Andhra minister opposes GST cess on sugar

Andhra Pradesh Minister of Finance and Planning, Commercial Taxes and Legislative Affairs Yanamala Ramakrishnudu has written a letter to the Chairman, Goods and Services Tax (GST) Council requesting not to impose the cess on sugar.

Ramakrishnudu further said that levying cess, which would cause additional burden on common people, was against the founding principle of GST of 'one tax, one nation'.

The GST Council in its 27th meeting over video conference on Friday discussed the issue of imposition of cess on sugar at the rate not exceeding Rs 3 per kg over and above the GST rate of five percent, stating that the sugar industry was in problems and the said collections would be utilised for the welfare of the sector in general and farmers in particular.

Ramakrishnudu mentioned that the central government had already stopped issuing sugar for public distribution due to which the state governments were forced to bear subsidy burden on sugar supplied through PDS.

The Andhra Pradesh government is burdened with the subsidy to the tune of Rs 250 crore per annum on sugar. Any additional levy on sugar in the name of cess will only increase the subsidy burden on the state.

Ramakrishnudu demanded that the proposal to levy a cess on sugar should be withdrawn, and the problems of the sugar sector may be addressed through direct budgetary support.

Keeping in view the record production of sugar in the current sugar season, and consequent depressed sugar prices and build-up of sugarcane arrears, the GST Council on Friday discussed the issue of imposition of sugar cess and reduction in GST rate on ethanol in great detail.

It has recommended to setting up a Group of Ministers from state governments to look into the proposal and make recommendations, within two weeks, keeping in mind the views expressed in GST Council in this regard.