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Kathmandu,Sunday January 30, 2000 Magh 16th, 2056.
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Sugar
import duty raised
from 25 to 40 pc
-By Bhaskar Sharma
KATHMANDU, Jan 29 - At
a time when the domestic sugar industries are struggling to survive
due to sugar imports in huge quantities, the government has decided to
raise the import duty from 25 to 40 percent.
The decision to raise
the sugar import duty was taken by the cabinet meeting on Thursday,
informed a high level source at the Ministry of Industry. The decision
will be implemented only after it is published in the gazette.
This is the second
time that the government increased the duty to such an extent. The
government had increased import duty from 10 to 25 percent some 7
months ago. This duty hiked partially meets the demand of
manufacturers.
Sugar manufacturers
were demanding to formulate anti-dumping laws to check dumping from
abroad. They were also demanding a raise in the customs duty to 40
percent and to lift Value Added Tax (VAT) on sugar.
“The decision
to raise the duty again was taken considering the forward and backward
linkages that the imports might have on this industry,” said Joint
Secretary at the ministry, Govinda Prasad Kusum.
With most of the major
sugar producing countries in the world, like Brazil, China and
Thailand, supplying sugar to the international market at a low rate,
the decision has come to the relief of domestic sugar industries that
are facing stiff competition with the imported sugar.
“The high cost of
production of the domestic sugar industries has rendered it difficult
for them to compete with the low-cost sugar from abroad. The
negligible profit margin has weakened this industry,” said Joint
Secretary at the Ministry of Industry Bhanu Prasad Acharya.
This is an important
step taken by the government to revive the sugar industry. With the
government having only two options of either imposing quantitative
restriction on imports or duty hike, the cabinet chose the latter, he
informed.
Although the domestic
industries currently have stock to meet the national demand of sugar
for almost 7 months, its low price in the international market has
prompted the opening of Letter of Credit (LC) to import 90,000 tons of
sugar, out of which 50,000 tons is already in the pipeline.
The national demand
for sugar presently is 1,30,000 tons while the total production
capacity of the total eleven domestic sugar industries is more than
1,50,000 tons.
Although the increment
in the import duty is seen as a positive step in promoting domestic
economy that would benefit the local industries and over 600 thousand
sugarcane farmers, a hike in sugar price seems likely. However, the
ministry rules out the possibility of price hike.
“The price of sugar
will not increase even after the decision is implemented,” claimed
Acharya. This is, argued Acharya, because the entrepreneurs themselves
are also involved in importing sugar at a low price and selling at a
comparatively high price keeping a larger profit margin. The existing
huge stock of sugar in the country and the domestic production are
likely to contain the rise in price, he claimed.
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