Mumbai, Nov 27: The Maharashtra State Cooperative Sugar Factories Federation has appealed to the state government to impose sales tax on imported sugar by private traders for open market sales on the lines of West Bengal and Tamil Nadu.

The National Federation of Cooperative Sugar Factories and Indian Sugar Mills' Association (ISMA) has also stressed the need for imposition of import/countervailing duty of at least 30 per cent ad valorem on imported sugar.

The three bodies have made it clear that ``avoidable imports will only create distortions in the sugar economy as we already have sufficient stocks of free sale sugar.'' ``Sugar produced in foreign countries will be dumped into the Indian market which will only benefit multinational trading houses and sugarcane farmers abroad at the cost of Indian farmers and the sugar industry,'' the national federation and ISMA have alleged.

Maharashtra federation chairman Vijaysinh Mohite Patil told The Financial Express that nearly 92,000 tonnes of sugar imported from Brazil had landed in the country of which about 30,000 tonnes has reached Mumbai. ``It is ironical that while imported sugar is priced at Rs 1,330 per quintal, local sugar is sold at Rs 1,470 including excise duty of Rs 85 and transport levy of Rs 35,'' he added. Patil said that the state sugar production was recorded at 35 lakh tonnes in 1996-97 while during the current year it would be 28 lakh tonnes. The carry forward stock of 11 lakh tonnes would have to be included in the current year's production, he stated, adding that there was no need for import of sugar in the given circumstances.

Patil said that the imposition of sales tax would discourage traders to import sugar and, in turn, help quick disposal of quota pending with sugar cooperatives from all over the state. ``Even if sugar import continues, imposition of sales tax will generate additional revenue for the state government,'' he added.

The national federation and ISMA have said that duty-free import of sugar was permitted in March 1994 when the country was passing through a situation of scarcity of sugar. Interestingly, the ``decision taken in such great hurry without mature consideration,'' has been since continued because in 1994-95, sugar production increased and prices declined steeply.

However, according to the national federation and ISMA, the situation changed later as there was a large surplus stock of free sale sugar within the country. Nation-wide sugar production during 1996-97 was recorded at 207 lakh tonnes, including 79 lakh tonnes of carry- forward stock.

During 1997-98, the country would have sugar production of 173 lakh tonnes, including 63 lakh tonnes of carry forward stock. There would be a carry forward stock of 33 lakh tonnes when the next crushing season would begin in October 1998.The National federation and ISMA have said that to ensure economic working of the industry, it would be necessary to maintain free sale sugar prices at levels corresponding to the break- even level. They reiterated that the import policy, free of customs duty/countervailing duty would vitiate the sugar price situation to the serious detriment of the Indian sugar industry and cane-farmers.