The Centre has stepped up physical verification of sugar stocks held by mills, stockists, traders and retailers after detecting discrepancies between sales records and Goods and Services Tax (GST) data submitted by certain sugar mills. The inspection drive, which began on October 9, comes amid concerns over tightening sugar supplies and rising demand during the festive season.
According to a communication issued by the Department of Food and Public Distribution, an examination of GST data and sales particulars submitted by some sugar mills for August 17–19 revealed inconsistencies, prompting authorities to initiate detailed verification of transactions and physical stock positions.
The inspection exercise involves cross-checking GST returns, sales invoices, buyer details and records of sugar dispatches and lifting. Physical stock assessments will also be conducted to establish whether reported sales match actual transactions and stock movements. The department has warned that discrepancies confirmed during the exercise could lead to legal proceedings against the mills concerned.
The latest action is part of the Centre’s broader efforts to improve sugar availability, regulate stock movements and strengthen transparency across the supply chain. The government had earlier shifted from monthly sugar allocation quotas to fortnightly allocations, followed by the introduction of weekly sales targets in October.
Under the revised allocation requirements, sugar mills must sell and dispatch, or ensure the lifting of, at least 45% of their allotted fortnightly quota during the first week. The remaining quantity must be sold and lifted during the following week. Failure to comply with these requirements could invite action under the Essential Commodities Act, 1955, and the Sugar (Control) Order, 2025.
The stricter monitoring also follows differences between government and industry estimates of sugar production for the 2025–26 season. Authorities are seeking to ensure that allocated quantities move through distribution channels rather than remain in inventories, potentially affecting market availability.
The verification drive assumes particular importance during the festive period, when demand from mithai manufacturers, confectionery producers, bakeries, beverage companies and other food processors generally increases. Traders have reported tightening supplies, raising concerns over the availability and timely movement of sugar in the domestic market.
By matching declared sales with GST records and physical stock positions, the government aims to identify reporting irregularities, discourage hoarding and ensure that sugar reaches the market in line with allocation requirements.
The department has reiterated that appropriate legal action will be initiated wherever violations are established. The intensified inspections reflect the Centre’s efforts to strengthen accountability among sugar mills and traders, maintain transparency in transactions, and safeguard domestic sugar availability during a period of heightened seasonal demand.