Government to raise cess on transportation of molasses

Pandurang Mhaske
Saturday, 28 October 2017

There are 95 co-operative sugar factories and 39 private sugar factories in the State. These 134 sugar factories produce molasses, which is used to manufacture spirit and liquor.

MUMBAI: After implementation of Goods and Service Tax (GST), the State government is concentrating on finding new ways to increase revenue. Now, it has decided to increase transportation cess on molasses, which will increase revenue by Rs 300 to Rs 400 crore annually. 

There are 95 co-operative sugar factories and 39 private sugar factories in the State. These 134 sugar factories produce molasses, which is used to manufacture spirit and liquor. The total production of the molasses is about 36 lakh tonnes per year and from this, 52 lakh litres Indian made foreign liquor and country liquor is produced by liquor factories.

These sugar factories sell the molasses to the liquor factories and the spirit factories for further production. These factories then produce 250 litres spirit from one tonne of molasses. 

The government was charging only Rs 1 per tonne as transportation cess on the molasses. 

The rate has not been revised since 1988, when it was implemented. Now it has been increased to Rs 500 per tonne.

An official of the Excise Department said, “The transportation cess was fixed when the price of molasses was Rs 50 to Rs 70 per tonne. In the last 30 years, the price of molasses has increased many times, but the transportation cess remained unchanged. So the government decided to increase the rate.”  

“Due to this hike in transportation cess, the government can earn revenue of Rs 300 to Rs 400 crore against the current Rs 25 lakh to Rs 30 lakh per year. The government has also decided to charge Rs 1,000 per tonne as transportation cess for molasses exported to other states. Every year sugar factories from Maharashtra export about 6 to 7 lakh tonnes molasses to liquor factories in neighbouring states. It will generate extra Rs 60 to Rs 70 crore revenue per year,” he said. 

According to the official, this will not affect the liquor prices much as the hike per litre is very low. 

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