Running against the principles of the Goods and Services Tax, the Council’s 27th meeting being held via video-conferencing on Friday may clear the imposition of a 5% Sugar cess. Currently, the government levies GST Compensation cess to compensate States that may incur losses in the first five years of GST implementation.
Sugar cess is a part of the GST Council’s agenda, but gains significance after the Cabinet meeting on Wednesday approved financial assistance at the rate of Rs. 5.50 per quintal of cane crushed in sugar season 2017-18 to sugar mills to offset the cost of cane and in order to help sugar mills to clear cane dues of farmers. Due to depressed market sentiments and crash in sugar prices, the liquidity position of sugar mills has been adversely affected, leading to accumulation of cane price dues of farmers. Due to depressed market sentiments and crash in sugar prices, the liquidity position of sugar mills has been adversely affected, leading to accumulation of cane price dues of farmers which have reached topped over Rs.19,000 crore. India last had a Sugar cess under The Sugar Cess Act 1982, the Sugar Development Fund Act 1982, but was abolished in 2017.
Currently there are a few more cess continue, but they are either on Customs or goods outside.
Cess continuing under GST regime (They pertain to customs or goods which are not covered under the GST regime)
- The Finance (2) Act 2004 – Education Cess on Imported Goods
- The Finance Act, 2007 – Secondary and Higher Education Cess on Imported Goods
- Cess on Crude Petroleum Oil under the Oil Industry Development Act, 1974
- Additional Duty of Excise on Motor Spirit (Road Cess)
- Additional Duty of Excise on High Speed Diesel Oil (Road Cess)
- Special Additional Duty of Excise on Motor Spirit
- NCCD on Tobacco and Tobacco Products and Crude Petroleum Oil .