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LAHORE, Jan 09 (APP):The Pakistan Sugar Mills Association (PSMA) Friday called for making Sugarcane Development Cess (SDC) in Punjab equal to the ratio imposed in other provinces.
A PSMA spokesman told the media here that the SDC had been in effect since 1964 by the Punjab government and it was levied on sugarcane in every crushing season. However, its ratio is factored in the cost of production of sugar.
He added that the tax (cess) on sugarcane supplied to the mills is collected by the government equally from sugar mills and farmers. This tax is used for construction and repair of roads from sugarcane fields to mills, construction of bridges, and research and promotion of the sugarcane crop.
Sugar mills keep receiving complaints from cane growers that this cess is not only higher than other provinces but also district governments collect the sugarcane cess budget but it is not used for the purposes specified in the law and the condition of farms to mills roads is dilapidated. He claimed that tax rate on sugar is already hight, citing that sales tax alone is 18 percent compared to 5 percent in India, 7 percent in Thailand and 13 percent in China.
The cost of making sugar has already increased, while sugar prices are much lower than its cost and the mills are suffering losses, he mentioned. Their production costs have risen in recent years, due to high taxation on sugar, expensive imported chemicals, high interest rates, and increases in minimum wages.
In Sindh and Khyber Pakhtunkhwa, the cess on sugarcane is currently much lower than Punjab. The sugar industry requests the government to reduce the cess on sugarcane in Punjab from Rs. 5 and bring it at par with other provinces.