Even as the Gujarat government on Thursday decided to waive, for one year, the four per cent value added tax (VAT) on the import of sugar, it expects the sugar production in the state to increase this season.
State Agriculture Minister Dilip Sanghani told Newsline this evening that the decision would benefit sugarcane growers as well as consumers especially when festivals are round the corner.
He claimed that the move would not harm the co-operative societies managing sugar factories or for that matter the sugarcane growers. Though a marginal increase in sugar production in Gujarat is projected this season, the quota of sugarcane being brought to sugar factories for crushing may get exhausted in the next four to five months. Hence, this decision, contended the minister.
Sources in the state Co-operative Sugar Producers Federation, however, apprehended that the decision to encourage the import of sugar by waiving VAT would harm the interests of not only local sugar factories, but also the farmers growing sugarcane in the state.
The state has as many as 17 sugar factories, including 15 located in south Gujarat and two in Saurashtra.
The sugar production in the state was recorded at 1.01 crore quintals in 2008-09, which is expected to increase to 1.18 crore quintals by October this year when the sugarcane crushing season begins.
Gujarat has enough sugar production, but since the Centre controls the prices of this sweet commodity across the country, local consumers or sugar co-operatives will not be benefited by the projected rise in its production, said a senior official.