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Friday, Aug 13, 2004

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Kerala: Pepper traders seek cut in purchase tax

G.K. Nair

Kochi , Aug. 12

THE India Pepper and Spice Trade Association (IPSTA) has urged the State Government to reduce the purchase tax on black pepper from the current four per cent to two per cent to enable the trade to compete with the imported produce from Sri Lanka.

"Reduction in purchase tax on pepper from 4 per cent to 2 per cent will help the domestic traders to compete the evasion of the tax that is taking place very widely through the borders of Wayanad and Idukki, thus the genuine dealers of Kerala can market out the Kerala pepper in the domestic markets besides competing with imported stuff from Sri Lanka," Mr Kishor Shamji, President, IPSTA, told Business Line.

He said that tax evasion has been rampant in these districts as the upcountry dealers were buying directly from the primary markets and moving out the produce by road.

Since the importers in other States do not have to pay any tax whatsoever either of the producing State or consuming State as they manage to avoid both by importing from Sri Lanka, he said.

"Therefore, to fight out such evasion also and to get more revenue to the State exchequer as well as to increase the movement of pepper from Kerala to other States, it will be highly appreciated if the State Government could reduce the purchase tax on black pepper from four per cent to two per cent till Mar 2005 as a special case to support the pepper farming community", he said.

He said that the IPSTA appreciated the Government's recent decision to procure pepper but at the same time there should have to be a foolproof mechanism to stop imported pepper entering the domestic market.

In the absence of such a mechanism, the agencies to be appointed soon would be procuring Sri Lankan pepper also, he apprehended.

The State Cabinet has decided recently to procure pepper, coffee and areca nuts from the growers. The procurement price and the agency would be decided soon by a high-level committee.

Production in Sri Lanka is in full swing now and the Island is estimated to produce 9,000 tonnes of pepper. Sri Lanka claims that its domestic market absorbs about 5,000 tonnes of pepper.

More Stories on : Spices & Condiments | Taxation | Kerala

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