Government dismisses request of Rs 6.6 billion subsidy on local sugar sale

ISLAMABAD: The defaulters of sugar mills had appealed to provide Rs 6.6 billion subsidy on domestic sugar sale, which is dismissed by the government.

According to sources, the defaulter sugar mills blamed for being implicated in tax leakages and its demand was determinedly opposed by the commerce ministry. They also emphasized that the freight subsidy granted to milers on sugar exports last year was not acceptable.

However, an additional appeal of the sugar industry to authorize state-owned Trading Corporation of Pakistan (TCP) to acquire 20,000 tons of sugar from the millers was also discarded by the government.

Recently, the newly lead Pakistan Tehreek-e-Insaf government revealed key tax evasion by the sugar millers in the sale of molasses, which is a byproduct of sugarcane. It is also observed that the sugar millers were found earning billions of rupees from the sale of molasses and making revenue by electricity generation.

A senior official of the commerce ministry stated, it had explained the Economic Coordination Committee in a latest meeting that sugar millers required exclusion from sales tax on sales in the local market.

The commerce ministry also mentioned that if the sales tax exemption is accepted, it will lead to surrendering a fixed subsidy of Rs 6.6 per kg on sugar exports.

Furthermore, he said freight subsidy had been presented on sugar exports so as to lodge the dissimilarity between local and global prices.

Also, last year the Ministry of Industries offered protuberance of the subsidy on the export of 2 million tons of sugar, to which the commerce ministry concluded that its computation exposed the subsidy extended was not acceptable.