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Harish Damodaran

NEW DELHI, Oct. 1

THE Finance Ministry has expressed concern over import of raw sugar by advance licence (AL) holders under the existing Standard Input-Output Norm (SION), which, it says, ``may cause substantial amount of revenue loss and may result in a scam''.

In a communication to the Commerce Secretary, the Chairman of the Central Board of Excise and Customs (CBEC), Mr M.K. Zutshi, has stated that exporters of white sugar, who are operating under the AL scheme through SION (entry 52), have been taking `undue benefits' by importing raw sugar of polarisation value up to 99.5.

This, in turn, has been facilitated by the revision of SION (entry 52) undertaken in May 2000, as per which duty free import of 1.2 tonnes of raw sugar to export one tonne of white sugar is permitted. Further, under Chapter 17 of the Customs Tariff Act (sub-headings 1701.11 and 1701.12), which covers raw sugar, ``raw sugar means sugar whose content of sucrose by weight, in the dry state, corresponds to a polarimeter reading of less than 99.5''.

According to the Finance Ministry, this definition of raw sugar ran contrary to the standards set for white sugar by the Bureau of Indian Standards. As sugar of sucrose content of 99.5 per cent does not require any further refining because white sugar under the definition given by the BIS is also of 99.5 polarisation, ``the AL holder would not only be able to avail of duty free benefit in respect of such sugar (by declaring it as raw sugar), it may also result in diversion/sale of 20 per cent quantity of sugar permitted in terms of SION entry 52 straightaway in the Indian market''.

The CBEC Chairman has said the customs field staff has been alerted ``to thwart this modus operandi which may cause substantial revenue loss and may result in a scam''. The Finance Ministry has also asked the Commerce Ministry to `suitably revise' SION (entry 52), so as to permit import of only 1.05 tonne of raw sugar or lower if justified (against the current norm of 1.2 tonnes).

The Finance Ministry has also directed the Chennai Port authorities to send representative samples of the imported consignment of raw sugar to the National Sugar Institute, Kanpur and CRCL, New Delhi for testing polarimeter readings.

Meanwhile, it is learnt that that first vessel carrying 38,000 tonnes of raw sugar from Brazil has arrived in the Tuticorin port, of which 30,000 tonnes have already been discharged and around 20,000 tonnes moved out of the port.

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