KARACHI, June 2: Pakistan Sugar Mills Association (PSMA), Sindh Zone, has suggested the government to exempt sugar mills from sales tax as it was a food item.

In a budget proposal to finance ministry for the forthcoming federal budget 2003-2004, PSMA said that industrial and commercial use of sugar can be subjected to sales tax.

The association said that if the sales tax was at all necessary on sugar mills for the sake of documentation, it should be at the rate of 6 per cent only.

PSMA said that surplus sugar production should be exported as this will stabilize sugar prices in domestic market and increase tax revenues, which can be used as cushion for export subsidy.—APP