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How has GST affected the Sugar Industry?

How has GST affected the Sugar Industry?

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How has GST affected the Sugar Industry?

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  1. How has GST affected the Sugar Industry? www.theengineeringportal.in Call Us : 9156044824

  2. The implementation of GST on July 1st 2017 has added a lot of chaos to every industry. Sugar traders reduced purchasing sugar in June due to the uncertainty regarding the new tax system and are now claiming that there is shortage of supply. While most of the industries have welcomed GST, sugar industry is still awaiting clarity on the tax that sugar mill machinery manufacturers need to pay. www.theengineeringportal.in / Call Us : 9156044824

  3. In India, sugar industry is one of the top generators of employment at front as well as back ends. And it is a sad scenario that there is still no clarity about how GST will affect them. Ashok Ranavat, president of Bombay Sugar Merchants’ Association, said,” We are still not sure if we will get back Rs.124/quintal cess that was purchased till 30th June 2017.” The association did not add any rate on its commodity on 1st July and instead declared that they had no stock. Due to this uncertainty, sugar wholesale traders stopped purchasing it and claimed that there was no supply. www.theengineeringportal.in / Call Us : 9156044824

  4. As per the previous tax rules, an excise duty of Rs.71/quintal was applicable which was about 2 percent of the sugar price. Also, a cess of Rs.124/quintal was applicable. Now, the new regime has applied a GST of 5%. To this, Sanjeev Babar, MD of the Maharashtra State Co-operative Sugar Factories Federation Ltd said,” 5 % GST on sugar will cause sugar to get expensive.” However, consumers in Tamil Nadu and Andhra Pradesh have some relief as sugar will get cheaper. This is due to the fact that these two states have phased out VAT. www.theengineeringportal.in / Call Us : 9156044824

  5. However, A. Vellayan, Chairman of Murugappa Group, which is one of the largest sugar tradersin South India feels that for some time, the demand for sugar will be low in Tamil Nadu as buyers will wait for clarity on GST than pay out the high VAT rate. www.theengineeringportal.in / Call Us : 9156044824

  6. According to most sugar traders, the real problem is in case of sugarcane fibre, press mud and bagasse which do not attract VAT but have 5% GST applicable to it. This has caused the traders to challenge the authorities as even the Supreme Court has upheld the fact that bagasse is a waste product and not manufactured. Also, by products of bagasse such as steam and power is partly used to manufacture few taxable goods, electricity, etc which are all outside the GST bracket. www.theengineeringportal.in / Call Us : 9156044824

  7. All these points have caused uproar and sugar traders as well as sugar mill machinery manufacturers feel that GST procedure needs to be worked out and be more precise. www.theengineeringportal.in / Call Us : 9156044824

  8. Contact Details admin@theengineeringportal.in www.theengineeringportal.in +91 9156044824 / 0231 2620003