The Hindu Business Line : TN tea traders amend CST manual rules

IN what is being hailed as a significant step, the tea trade associations of Coimbatore and Coonoor have amended their central sales tax (CST) manual rules in a bid to increase outstation buyer participation at auctions.

``CST buying will henceforth be allowed at auctions,'' Mr N. Anand, Chairman, Coimbatore Tea Trade Association, said.

Mr Anand told Business Line that the association at its recent management committee meeting had decided to amend certain rules, in accordance with TMCO, so as to allow CST buyers to operate at the auctions. He maintained that the market had already reacted positively to the recent decision.

``We have decided that the principal buyers from upstate can appoint a representative or an individual who can bid in the auction on his behalf. The individual appointed will have to provide some sort of a guarantee which will have to be backed by an existing member of the association,'' member sources said.

On their part, the Coonoor Tea Trade Association (CTTA) has decided that CST buyers will be made special members of the association but without voting rights.

``The buyer should preferably authorise an individual or someone from the commissioning agent's office as his representative to buy on his behalf,'' Mr O.R.M Prabhu, Chairman, CTTA, said. The collection will be done by the agent.

While the association has given the CST buyers time up to March 31 to fulfil all membership formalities, their representative can operate if given an authorisation signed by them.

The move has sent a wave of relief amongst the tea trade which is of the view that this initiative will bring about a significant improvement in auction participation.

``The Tea Marketing Control Order ruling on proxy buying coupled with the sales tax anomaly in the state has been keeping outstation buyers away. This has been weakening the very structure of the auction system,'' a senior tea trade member said.

However, sources at Coimbatore and Coonoor said that other criteria such as the brokers seeking indemnity or a contingency deposit of 4.5 per cent from upstation buyers etc still hold good.

``That is a different issue and as long as the CST-TNGST imbroglio remains unresolved the brokers are at a liberty to call for some sort of an indemnity,'' trade sources said.

Last week, some commissioning agents or brokers had said that upstate buyers could either cough up a deposit or indemnify themselves to pay up in case the Tamil Nadu Government claims arrears under TNGST for sales made under CST.

A moot point to note is that Tea Serve, the Government sponsored electronic auction centre, resumed CST buying two weeks ago.