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Row over ICWAI study on small tea growers

Nilanjan Dey
Kohinoor Mandal

The study, sources say, has not been able to identify specific problem areas, which should ideally invite governmental action pertaining to the entire tea industry.

Kolkata , Nov. 6

A STUDY by the Institute of Cost & Works Accountants of India (ICWAI) for the Tea Board on the cost of production of green leaf in the small growers' segment and tea in bought leaf factories has raised some tricky issues.

A section of the cost accounting fraternity has pointed out that the institute, as an organisation set up without a profit motive, is not in a position to conduct such a study at all. Conducting it for a fee actually pitches ICWAI against its own members - professionals who would rather carry it out themselves for a monetary consideration.

The institute, according to sources, may not take up consultancy projects on its own, not with a view to making money. In other words, for the sake of fairness, it may not compete with its own members. It is further pointed out that ICWAI, which does not even pay service tax, should lose its `income tax exempted' status if profit is earned on the basis of consultancy mandates.

The ICWAI study, sources maintained, has not been able to identify specific problem areas, which should ideally invite governmental action pertaining to the entire tea industry. It may be mentioned here that earlier this year the Tea Board had engaged ICWAI to examine the cost of small tea growers as well as the cost of manufacturing at the bought leaf establishments. The bought leaf units process tea leaves purchased directly from the gardens. Besides travelling and other related expenses, the Tea Board authorities were to pay Rs 8 lakh to ICWAI for the project. Mr N.K. Das, Chairman of Tea Board, was not available for comment.

Sources, incidentally, referred to what they said was legal opinion - obtained earlier - that prevented ICWAI from accepting consultancy mandates. Certain provisions of the law related to cost and works accountants maintain that projects/consultancy mandates may be handled by cost accountants in practice and not by the institute or its regional councils and chapters. A few members of ICWAI's central council are also known to have written to the Government, underlining such legal opinion.

However, some ICWAI officials maintain that the Tea Board project requires serious research, on which certain important decisions may be based in future. This, therefore, may not be called an infringement. It is further opined that few cost accounting outfits have the right infrastructure to pursue such a study.

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