Uttarakhand is planning to impose a two per cent entry tax on sugar coming from outside the state, especially from Maharashtra and Uttar Pradesh.
The move is seen as a step to counter the two per cent entry tax on sugar already imposed by Uttar Pradesh.
"We are unable to get fair price of our sugar in Uttar Pradesh due to the two per cent entry tax already imposed there. Our entry tax will provide a cushion to our own ailing sugar industry," said a senior government official.
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The entry tax in the neighbouring state is acting as a bitter pill for the sugar industry in Uttarakhand, where sugar stocks of 3.2 million quintals have been accumulated in one to two months.
"During the past few months, sugar stocks have been piling in the godowns of various sugar mills in the hill state. The stock is not getting fair price from the sugar-consuming industry," said a senior official of the Doiwala sugar mill here.
The entry tax of two per cent on sugar coming from outside the state would help spur the sale of the local sugar, experts said.
According to sugar department sources, the sugar consuming industry in the hill state, like Nestle, is buying sugar from Maharashtra and Uttar Pradesh which are giving some discount as there is no entry tax in those states.