Govt. Of India Hikes Import Duty On Sugar From 25 To 40 Per Cent

29 April, New Delhi

Union Government Wednesday decided to raise import duty on sugar to 40 per cent, from 25 per cent. The decision was taken at the meeting of the Cabinet Committee on Economic Affairs in New Delhi Wednesday . This would prevent any imports in case international prices of sugar are to depress further.

The CCEA has also decided to remove excise duty on ethanol to help mills clear dues to farmers. Presently 12.36 per cent central excise duty is levied.

A statement said, ethanol produced from molasses generated during the next sugar season and supplied for ethanol blending will be exempted from excise duty and the price benefit would be passed on the to the sugar mills and distilleries.

The government said that these steps would significantly improve the adverse price sentiments in respect of sugar and would improve the liquidity in the industry, facilitating the clearing up of cane dues arrears of the farmers.

Earlier this month, Food Minister Ram Vilas Paswan had held two separate meetings of farmers and chief ministers to resolve the cane arrear crisis.

To bail out the cash-starved sugar industry, the Centre had in August last year hiked the import duty on both raw and refined sugar to 25 per cent from 15 per cent. In February this year, it provided a subsidy of Rs 4,000 per tonne for the exports of 1.4 million tonnes of raw sugars.

Apart from hike in import duty and removal of excise duty on ethanol, the government has decided to withdraw the ‘Duty Free Import Authorization’ scheme. Under this, exporters of sugar can import permissible quantities of raw sugar without any duty for subsequent processing and disposal. The statement said, to prevent leakage of sugar made from such duty free imports in the domestic markets, the DFIA scheme for sugar would be withdrawn.