As India gets ready for the roll out of the Goods and Services Tax (GST), sugar merchants have asked for the commodity to be left out of the ambit of GST. In a letter to Union Minister for Finance Arun Jaitely, the Bombay Sugar Merchants Association Limited has urged that sugar prices and the trade itself would be disrupted if sugar is brought under GST.
Mukesh Kuvadia, secretary of the association, pointed out that sugar was the only essential commodity to be brought under the GST regime. “At present, the only tax the commodity attracts is the excise tariff, of Rs 71 per quintal, which charged at the mill gate. This works out around two per cent on the ex-mill prices of sugar,” he said. The proposed GST slab of five per cent, Kuvadia said, would increase the retail price of sugar and affect the householders.
GST talks about putting the liability of pre-sellers tax default on traders. Kuvadia said this would be disastrous for the traders, as they will have to pay the default of sugar mills. Already, traders operate on razor-thin margins, he added. At present, 65 per cent of domestic consumption is by the industries, while 35 per cent is by householders. Any change in the tax structure will hit the household customer the most.
The industry, Kuvadia said, is uncertain about the way it will function post GST. Making a strong plea for zero slab in GST, the letter had also urged that the implementation be deferred.