Sugar cess divides state governments at GST Council meeting

With sugar prices below the cost of production, mills' payment arrears to cane farmers is over Rs 200 billion

The idea of a cess on sugar of around Rs 3 a kg to fund the Centre’s scheme for helping cane farmers had state governments differing at Friday's meeting of the Goods and Services Tax Council.

The major sugar producing states of Uttar Pradesh and Maharashtra, with Bihar – all ruled by the Bharatiya Janata Party directly or in alliance — seconded the proposal. It would enable the Centre to get the Rs 15.4 billion required to fund the Rs 5.5 a quintal for cane growers, announced by the central government this week.

The idea was to help