Saddled with huge stocks of unsold sugar, the industry in Andhra Pradesh has heaved a sigh of relief with the Government deciding to source all its sugar requirements from local factories and do away with Value Added Tax and Central Sales Tax.
The Government is a major consumer of sugar as it requires about 1 lakh tonnes of the commodity for its public distribution system (PDS) and other needs. The South India Sugar Mills Association (SISMA–Andhra Pradesh) has been demanding the Government remove taxes.
Traders have been importing sugar from the neighbouring States where there is no VAT, resulting in piling up of stocks.
“That sugar stocks worth ₹800 crore are piled up in godowns shows how serious is the problem,” N Nageswara Rao, President of SISMA (AP), told BusinessLine . It is estimated the Government might have to forego a tax income of ₹75 crore on this count.