VAT reduction on ethanol benefits sugar mills

Gandhinagar, May 23: After the value added tax (VAT) of 12.5 per cent was reduced to four percent on ethanol, the by-product of sugar produce, the seven sugar mills in the state will rake in crores of rupees of profit.

After the reduction of VAT, the sugar mills will be able to produce ethanol worth Rs seven to eight crore every year, a release said.

Earlier, oil companies stopped purchasing ethanol due to the VAT imposed on it, following which sugar factories have stopped producing ethanol from past two years.

UNI