Stakeholders from the sugar industry in Tamil Nadu feel that the State did not do justice to them. Removing VAT would have given a boost to this sector, they think. The South Indian Sugar Mills Association, Tamil Nadu (SISMA-TN), which met in Chennai on Thursday, said they hoped that Tamil Nadu Sugar Industry which is passing through the most traumatic period would be given some succour.
“Abolition of VAT would have given the much needed reprieve for Tamil Nadu sugar industry,” said SISMA president Palani G Periasamy. He further said, “It is very sad to note that while all power plants using biomass as fuel have been granted exemption from Electricity Generation Tax, co-generation plants in sugar mills using bagasse have been left out though we also produce green energy.”
Sugar industry is facing huge challenges in all their revenue streams – sugar, power and distilleries. “We request the State government to abolish VAT on sugar and to increase the administrative fee on alcohol imports from neighbouring states suitably to create a level playing ground,” Mr. Periasamy said.
Industrial alcohol produced by distilleries attached to Tamil Nadu sugar mills have to pay VAT at the rate of 14.5 per cent whereas imports from neighbouring States attract only 2 per cent CST. This translates into a price advantage of Rs. 5 per litre for imports affecting our sales.
