The Hindu Business Line : ‘No levy obligation on processed imported sugar’

“The Government has already notified that there would be no levy obligation (on such sugar). The Government stands by its commitment and reassures that there would be no levy obligation on processed imported raw sugar or imported white/refined sugar”, the Chief Director (Sugar) in the Department of Food and Public Distribution, Mr R.P. Bhagria, told Business Line.

Currently, mills processing domestically sourced cane are required to deliver 10 per cent of such sugar produced as ‘levy’ for the public distribution system (PDS).

There is no similar obligation when it comes to whites processed from imported raw sugar, though a section of the industry believes that the Centre may extend it in the light of its recent moves to augment PDS supplies for poor households.

While the processed imported sugar does not attract any levy now, it is, however, subjected to the regulated release system just as the sugar processed from domestically sourced cane.

Under the release mechanism, each mill is allocated a defined quantity of sugar that it has to sell in the open market during a particular month of a quarter.

In the case of processed imported sugar, the Centre had initially stipulated a three-month timeframe within which mills had to dispose of such sugar in the market. But recently, this validity period (from the date of issue of ‘release orders’ pertaining to such sugar) was reduced to one month – which, the industry claims, amounts to a sudden changing of the rules of the game and discouraging any raw imports.

Mr Bhargria, however, maintained that the Centre had never indicated that the processed imported sugar would be kept outside the purview of the release system.

“Mills were clearly told that sugar processed from imported raw sugar would be subjected to regulated release mechanism”, he stated.

Moreover, many mills had also asked that they be permitted to sell such sugar quickly than would be the case under the normal release mechanism applying to sugar processed from domestic cane.

“It was to encourage quick disposal of sugar processed from imported raw sugar that the Government decided to give accelerated releases in respect of such sugar and allow it to be disposed of within three months, which has now been reduced to one month in view of the need to ensure adequate supplies during the festival months,” Mr Bhagria added.

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