Parle takes govt to court over sugar levy

Parle Biscuits India Pvt Ltd has taken the government to court over the consumer affairs ministry's order to charge 10 per cent levy on its sugar output, for sale through fair price shops under the public distribution system.

While Parle wants exemption from the levy, which is requisitioned from the domestic producers and importers of sugar, the government has vehemently opposed it on the ground that it is short of 18 lakh tonnes of sugar to be distributed through the PDS.

In a writ petition filed in the Delhi High Court, the biscuit manufacturer has claimed that it is actually a consumer of sugar, not a producer. The sugar plant, which was set up early this year, has the capacity to produce around 3,200 tonnes crushed daily of sugar.

According to the company, it requires around 3,750 tonnes of sugar every month for its biscuit manufacturing unit in Uttar Pradesh itself and, therefore, whatever sugar is produced will be captively utilised by the biscuit unit in the same state.

Parle produces4,50,000MT of biscuits annually. The company has also said that its unit was started under the 1997 incentive scheme which had exempted companies from the obligation to sell sugar to the government, at the rate fixed by the authorities, for eight years.

Although the government is yet to argue the case in the court, it has filed its reply to the writ petition. According to the government, Parle began its unit after the sugar industry was de-licensed in 1998.

Also, it is running short of stock to feed the PDS. "If Parle is exempted under this category, it will open a Pandora's box," the government's counsel said.