Govt. considers sweet deal on brown sugar, VAT to be removed on imports: Minister

• 130,000 tonnes required annually but around 70,000 tonnes produced locally 

By Ajith Siriwardana and Yohan Perera   

Locally produced brown sugar has faced a serious crisis due to higher prices. 

 
Industry and Entrepreneurship Development Minister Sunil  Handunnetti said a Cabinet Paper would be presented to reduce the Value  Added Tax (VAT) on brown sugar, as selling of locally produced brown  sugar has faced a serious crisis due to higher prices.   

He told Parliament that a tax of 20 per cent is imposed on  brown sugar including 18 per cent VAT which cost a kilo of brown sugar  Rs. 300 at the factory.   

The Minister said VAT is not imposed on white sugar and  that a kilo of white sugar is sold at Rs. 220 and added that the price of  brown sugar will equal white sugar after removing VAT.   

He said the annual requirement of sugar is 130,000 tonnes and that Sri Lanka had the potential to produce around 70,000 tonnes.   

The Minister said this while responding to a question by  NPP MP R.M. Jayawardena, who said that some 23,000 kilos of sugar and  over one million litres of ethanol were stored in the Pelawatte sugar  factory, unable to be sold.