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The Directorate General of Foreign Trade (DGFT) has issued important procedural amendments and corrigendum regarding duty-free import of 10 lakh metric tonnes (MT) of raw sugar announced by the Central Government to maintain adequate availability of sugar in the domestic market and control retail prices during the upcoming festive season.
DGFT, under the Ministry of Commerce and Industry, has provided necessary clarifications and relief in the pre-determined deadline (31 October) and operating conditions for import of raw sugar and sale of refined sugar prepared from it in the domestic market under the Tariff Rate Quota (TRQ) scheme.
Basis of Raw Sugar Import Policy and Tariff Rate Quota (TRQ)
As per the notification issued by DGFT under Chapter 17 of ITC (HS) 2022 for Exim Code 170114, import of Raw Sugar has been kept ‘Free’ but it is allowed at Zero Duty-Free under Tariff Rate Quota (TRQ) of 10 Lakh MT.
Under normal circumstances, a heavy customs duty of 100% is imposed on sugar imports. The Central Board of Indirect Taxes and Customs (CBIC) has also made this process effective by issuing due notification of customs duty exemption.
Key points of amendment and corrigendum in deadline
The industry and sugar mills had raised concerns over the impracticality of the time limit considering the shipment of raw materials from international markets (especially Brazil and Thailand), the transit time to reach India by sea route and the time taken for transportation and processing from ports to refineries.
The main points of the corrigendum and clarification issued by DGFT are as follows:
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New window for importing and refining: Adequate time has been given to importers by revising the last date to bring, refine and market the imported raw sugar at Indian ports under the allotted quota of 10 lakh metric tonnes.
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Application Process Deadline: The deadline for online application on the Import Management System portal of DGFT has been fixed for allotment of import quota.
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Priority Criteria: Special preference in allotment is being given to those importers and mills who are registering commitments to complete the shipment within the initial time frame.
One-time conversion from advance authorization to TRQ facility
Under DGFT rules, major relief has been given to those mills and refineries which already had stock of raw sugar available under ‘Advance Authorization’ (SION E-52):
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One-Time Conversion: Advance Authorization holders can convert their imported raw materials into TRQ scheme.
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GST Adjustment: Under this, necessary payment of GST exemption taken at the time of import will have to be made.
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Supply to Domestic Market: The immediate festive demand can be met by selling the refined sugar prepared from this in the domestic market.
Only mills with actual refining capacity are allowed
DGFT has clarified that this import quota will not be given to any trader or middleman. Only those sugar mills and refineries which have their own operational and valid operational facilities for converting raw sugar into white/refined sugar will be eligible. For this, it is mandatory to submit ‘Consent to Operate’ (CTO) certificate issued by the State Pollution Control Board and self-declaration of capacity.
This step of the government will ease the supply of sugar across the country in the upcoming festive months and will help in maintaining control on prices in the retail market.