In order to fund the subsidy to the farm sector, the GST Council is mulling over the proposal to implement and levy 1% agriculture cess on luxury items. The sugar industry is to meet huge amount it ows to the sugarcane farmers and the amount has spiked to unsustainable levels.

As per sources, Assam finance minister with the GoM will consider whether or not a separate agriculture cess can be levied under the new GST regime which has further subsumed all cesses, surcharges, taxes and other levies.

The earlier proposal to implement sugar cess has been done away with and the new proposal will be put before the GST Council in its next meet scheduled for July 21.

Earlier the GoM was formed to consider the levy of cess of Rs. 3 per kg of sugar over and above 5% GST. Also, it has been notified that after the minimum support price for sugar has been revised higher to Rs. 29 per kg, the arrears which were due to cane farmers have come down heavily by Rs. 5000 crore to just Rs. 18000 crore.

In the next GST Council meet, the Centre will consider rate cut on items with low revenue impact such as sanitary napkins, handicrafts and handloom goods, besides certain services as per the agencies' report.

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