Step 1 - Whare are litmus paper?
Litmus paper is an acid-base indicator, i.e., it is used to discover whether a given solution is basic or acid.
It works like this:
red litmus paper --> turns blue in basic solutions; remains red in acid ones
blue litmus paper --> turns red in acid solutions; remains blue in basic ones
Step 2 - What about the sugar solution?
If a solution does not change the colour of either red or blue litmus paper, it simply means that the solution is nor acid nor basic: it is neutral.
Answer: it tells the sugar solution is a neutral one.