With the GST bill being passed and the GST on sugar being decided at 5% in AP, its price is sure to tumble. Though the prices will drop only in AP and Tamil Nadu, there is no need for the consumers of the other states to worry as the new taxation rate is quite at par with the current rates in these states i.e. 5.5%.
According to Indian Sugar Mills Association (ISMA), the state of Andhra Pradesh with VAT introduced for sugar can look forward to a lower price after the introduction of GST. However they added that the other states need not worry about any extra burden on them as the current taxation rate on sugar is just 5.5% which is quite close to the 5% GST that will be introduced.
The President of ISMA, T Sarita Reddy said that the decision to impose 5% GST on sugar was an expected one and that they are very happy with it. At present, the sugar mills are paying an excise duty of INR 71/quintal on sugar and education cess and sugar cess at INR 124/quintal. With the current tax rate of 5.5%, the price of sugar amounts to INR 3600/quintal.
Though all the mill owners are happy with the development, the sugar traders believe that it should have been included in the no tax bracket. The President of Bombay Sugar Merchants Association, Ashok Jain said that they were expecting that sugar would be exempted from the taxation bracket once GST was introduced.