The Hindu Business Line : TN sales tax imbroglio — Uncertainty looms over sale of 36 lakh kg teas

THE fate of an additional 18-19 lakh kg of tea hangs in balance with the sales tax imbroglio continuing to hold up auctions at Coimbatore and Coonoor.

Last week, suspension of auctions at the two centres had seen around 18 lakh kg of tea being set aside. Under TMCO, teas once catalogued for auctions cannot be withdrawn or sold even at private auctions.

Given that catalogue closing for this week has been extended, the exact quantum of teas that are to be sold at both centres is still to be arrived at. Trade sources, however, said the quantum should be around 18-19 lakh kg. Therefore, if auctions are not held for the second consecutive week, it would mean that a quantum of around 36 lakh kg (for the two weeks) of tea would pile up.

An element of uncertainty continues to surround the trade despite the delegation of bought leaf producers and small growers to Chennai having met with a `more than positive' response.

The trade is particularly uncertain in the light of the fact that even as the meeting was being held in Chennai, several brokers in Coonoor were served with fresh notices for the year 1999-00, while a few others were asked to submit details of their balance sheet. Additionally the Commercial Tax Officer (CTO) of Coonoor had also written to the brokers asking them to re-commence auctions as the Tamil Nadu Government was losing revenue.Concerns about a payment crisis in the industry following suspension of auctions is mounting, given the fact that bought leaf factories in Kotagiri have advanced growers a sum of Rs 2.50 per kg for leaf.

The reasoning being that no auctions has meant that the factories have been unable to dispose of their teas which in turn means no active remuneration for the producers.

However, Mr M. Bhojarajan, President, Nilgiris Small Growers' Association, told Business Line that the brokers should act upon the assurance given by the Government and resume auctions.

Tea auctions at Coimbatore and Coonoor have been suspended following recovery notices served by the Tamil Nadu Government to leading brokers claiming tax under the Tamil Nadu General Sales Tax (TNGST) for the sales effected as under Central Sales Tax (CST).

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