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Deeptha Rajkumar

Wellington (Nilgiris,) Dec. 16

THE Tamil Nadu sales tax tribunal at Chennai has put off the hearing on the writ petition filed by tea auctioneers to February 6.

Informed sources told Business Line that the hearing was postponed as the prosecution was not prepared. "They have asked for some more time,'' sources said.

This is likely to cause some uncertainty over tea auctions in Tamil Nadu. The Coonoor Tea Trade Association (CTTA) had, earlier this month, decided to conduct auctions but review the situation after the tribunal hearing on December 16.

A controversy has cropped up over the Tamil Nadu commercial tax authorities slapping a recovery notice on brokers for teas sold at Coimbatore and Coonoor auctions during 1999-2000 and 2000-01 claiming arrears under the TNGST (Tamil Nadu General Sales Tax Act)for sales made under the CST (Central Sales Tax).

Mr O.R.M. Prabhu, Chairman, CTTA, told Business Line that auctions would be held this week as usual under the stipulated caveat. "Next week there will be no auctions on account of Christmas. We will meet then to review the situation,'' he added.

The tea trade associations of Coonoor and Coimbatore had decided to conduct auctions in the interests of the trade. However as a contingency measure, tea brokers/auctioneers at Coonoor and Coimbatore decided to ask for an additional 4.5 per cent sales tax upfront as deposit from upcountry buyers before raising the CST contracts. Further, Coonoor brokers also decided to ask for an additional 1.5 per cent deposit from the sellers in a bid to offset any additional sales tax that they may incur.

CTTA & TTAC (Tea Trade Association of Coimbatore) officials said as per the current norms, tea brokers were entitled to collect deposit at any time, at their discretion. There is no cap on the deposit that can be collected.

Meanwhile, the Tea Board has said the present system of division of lots with a premium of 5 per cent will continue beyond January 1. In a letter to the CTTA, it said the earlier directive that no division of lots would be allowed with effect from January 1 was to be kept in abeyance.

The present system of allowing 14-day prompt time will also continue beyond January 1. Earlier this year, under the new TMCO (Tea Marketing Control Order), it had been proposed that prompt time be reduced to six days. The industry had been given one-year grace period and it was to have been implemented from January 1, 2004.

The stipulation that all bidders must be physically present for at least 25 per cent of the total sales in a year or a minimum of 13 sales in a purchase year, whichever is lower will also not be insisted upon.

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