New Delhi: The Indian government has taken a stringent stance against over-selling in the sugar market, issuing show-cause notices to over 20 sugar companies and mills that have allegedly exceeded their allocated quotas, reported The Hindu Business Line.
As per media report, some companies have sold between 30-40% more sugar than the assigned quantity. Action is anticipated following the submission of responses, with certain companies yet to reply to inquiries.
The Food Ministry, responsible for monthly sugar sales allocations in the open market, had designated 98 lakh tonnes for the four months spanning October 2023 to January 2024. However, during a review of monthly returns, the government discovered that certain mills had surpassed their allotted sugar sales quantities.
Given the election year and the expected decrease in sugar production compared to the previous season (2022-23), the government is reportedly taking the matter seriously and is contemplating appropriate actions based on the responses received. Although the government holds powers under the Sugar Control Order (SCO) to seize mill stocks, potential penalties and reductions in quotas are being considered, ensuring that overall monthly quotas remain unaffected to prevent adverse impacts on prices.
The Ministry identified the excess sugar sales during the verification of monthly returns, cross-referencing the data with GST returns. In a letter addressed to all sugar mills, Sangeet, Director (sugar), emphasized the importance of adhering to monthly stock holding limits, established under various regulatory orders, to maintain stability in sugar prices. Sangeet highlighted deviations from these limits as potential disruptions to the domestic sugar market and government initiatives in support of the sugar industry.
The Director also pointed out disparities between domestic sales data in GST records and information provided by some mills in their monthly P-II forms to the Food Ministry’s Directorate of Sugar through the online portal. Inconsistencies in weighing units used for e-invoices under GST, such as tonnes, quintals, kg, packets, bags, and boxes, were also noted. Recent guidelines issued by the Sugar Directorate now mandate all mills to use metric tonnes for filing returns, promoting uniformity in reporting.
While the guidelines stipulate that mills must sell at least 90% of their monthly release quota and reduce the quota in the subsequent month in case of non-compliance, a grace period of 15 days may be granted for genuine issues. Nonetheless, the government intends to take strict action against non-compliant factories that exceed their monthly release quotas.
