Ministerial committee opposes cess on sugar

A group of State Finance Ministers set up by the Goods and Services Tax (GST) Council is against the imposition of a cess on sugar, and is likely to recommend a reduction in GST on ethanol, according to highly placed government sources.

Their recommendations will be presented at the next meeting of the GST Council on July 21. Before making a final recommendation, the Ministerial panel is waiting for the Attorney General to give his legal opinion on whether any such cess can be imposed under the GST regime. “However, the political call has been taken that there will be no cess,” said a senior government official.

With regard to the GST on ethanol, the panel has decided to recommend a reduction from the current 18% to at least 12%. A senior official said the final recommendation was more likely to be 5%.

The original proposal to impose a cess on sugar came from the Food Ministry and was recommended in April by an earlier Group of Ministers headed by Transport and Shipping Minister Nitin Gadkari.

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