NEW DELHI: As part of the exercise to move towards the uniform goods and services tax (GST), the Finance Ministry in its forthcoming budget is likely to abolish sugar cess , a levy which forms corpus of the Sugar Development Fund (SDF) and is used for modernisation and expansion of mills.The Centre is levying the cess, collected as an excise duty, of Rs 124 per quintal on the sweetener produced by any factory in the country. It was raised substantially from Rs 24 per quintal only last year.The cess, collected from sugar mills, is deposited in Sugar Development Fund (SDF) managed by the food ministry. The fund is used to lend money to mills at lower interest rates.According to sources, various kinds of cess and surcharges are levied on goods and services. Since inception, about Rs 7,500 crore has been disbursed to sugar factories.The food ministry has further sanctioned SDF loans of Rs 865 crore for disbursement in 2016-17 and 2017-18. In recent years, SDF has been used to finance various interventions of the government to deal with the crisis in the sugar industry.The country's sugar production is estimated to be lower at 22.5 million tonnes in the 2016-17 marketing year (October-September), as against 25.1 million tonnes last year.

Source: Economic Times January 29, 2017 08:11 UTC