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Sugar traders observed a one-day strike on Thursday to protest the 5 per cent GST levy on the industry .
Sugar has not attracted any State tax since 1947 except for an excise duty of ₹71 per 100 kg at the factory gate to ensure its availability at an affordable price.
The current fixed tariff on sugar works out to 2 per cent of the ex-mill price. The cost on consumers will increase with the GST levy of 5 per cent on the landed price at the consumer-end. Mukesh H Kuvadia, Secretary of the Bombay Sugar Merchants’ Association, said tax-related formalities under GST posed problems for traders . This may impact free availability of sugar across the country, he said.
Traders were working on slender margins, and were wary of liability in case of GST default by the pre-seller (largely sugar companies). “Many sugar mills have defaulted in settling dues to farmers, banks and cooperative societies. Any default on GST payment by the mills will adversely affect traders and whole-sellers,” he said.
Panicky traders also fear they have to pay GST on their current inventory, which was earlier tax-free. Free movement of goods may be disrupted after June 25, he said.
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