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The Agriculture Ministry is in favour of increasing the excise duty on sugar by Rs 1.50 per kg, Union Agriculture Minister Sharad Pawar said on Monday.
The current excise duty on sugar stands at Rs 98 per quintal.
“We support the Food Ministry’s proposal in this regard,” Pawar told reporters on the sidelines the annual general meeting of the Indian Council of Agricultural Research.
Levy burden
The Food Ministry is in favour of increasing the excise duty on sugar to offset the levy burden even as the Government gears up to remove the controls on sugar sector, including doing away with the levy obligation.
Such a move is expected to help the Government reduce its financial burden on selling the sweetener to poor families at subsidised rate under the public distribution system.
Levy system
Under the levy system, the sugar factories currently have to sell 10 per cent of their total produce to the Government at Rs 19.04 a kg against the ex-factory price of around Rs 31 per kg.
This levy sugar is sold by the Government at Rs 13.50 per kg to the poor families under PDS, incurring a subsidy burden of around Rs 2,500 crore a year.
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